Principles of Accounting Volume 2
19th Edition
ISBN: 9781947172609
Author: OpenStax
Publisher: OpenStax College
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Textbook Question
Chapter 3, Problem 6PA
Morris Industries manufactures and sells three products (AA, BB, and CC). The sales price and unit variable cost for the three products are as follows:
Their sales mix s reflected as a ratio of 5:3:2. Annual fixed costs shared by the three products are $25,000 per year.
- What are total variable costs for Morris with their current product mix?
- Calculate the number of units of each product that will need to be sold in order for Morris to break even.
- What is their break-even point in sales dollars?
- Using an income statement format, prove that this is the break-even point.
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Morris Industries manufactures and sells three products (AA, BB, and CC). The sales price and unit variable cost for the three products are as follows:
Product
Sales Priceper Unit
Variable Costper Unit
AA
$50
$25
BB
45
10
CC
30
15
Their sales mix is reflected as a ratio of 5:3:2. Annual fixed costs shared by the three products are $390,000 per year.
A. What are total variable costs for Morris with their current product mix?
orris Industries manufactures and sells three products (AA, BB, and CC). The sales price and unit variable cost for the three products are as follows:
Product
Sales Priceper Unit
Variable Costper Unit
AA
$55
$30
BB
45
15
CC
30
15
Their sales mix is reflected as a ratio of 5:3:2. Annual fixed costs shared by the three products are $220,500 per year.
A. What are total variable costs for Morris with their current product mix?
Total variable costs $fill in the blank e0b38b060fef067_1
B. Calculate the number of units of each product that will need to be sold in order for Morris to break even.
Number ofUnits per Product
AA
fill in the blank e0b38b060fef067_2
BB
fill in the blank e0b38b060fef067_3
CC
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C. What is their break-even point in sales dollars?
Break-even point in sales $fill in the blank e0b38b060fef067_5
D. Using an income statement format, prove that this is the…
Morris Industries manufactures and sells three products (AA, BB, and CC). The sales price and unit variable cost for the three products are as follows:
Product
Sales Priceper Unit
Variable Costper Unit
AA
$55
$25
BB
40
10
CC
30
5
Their sales mix is reflected as a ratio of 5:3:2. Annual fixed costs shared by the three products are $377,000 per year.
A. What are total variable costs for Morris with their current product mix?
Total variable costs $fill in the blank 5d1c9104201ef8e_1
B. Calculate the number of units of each product that will need to be sold in order for Morris to break even.
Number ofUnits per Product
AA
fill in the blank 5d1c9104201ef8e_2
BB
fill in the blank 5d1c9104201ef8e_3
CC
fill in the blank 5d1c9104201ef8e_4
C. What is their break-even point in sales dollars?
Break-even point in sales $fill in the blank 5d1c9104201ef8e_5
Feedback
A. Determine the composite sales price,…
Chapter 3 Solutions
Principles of Accounting Volume 2
Ch. 3 - The amount of a units sales price that helps to...Ch. 3 - A companys product sells for $150 and has variable...Ch. 3 - A companys product sells for $150 and has variable...Ch. 3 - A companys contribution margin per unit is $25. It...Ch. 3 - A company sells its products for $80 per unit and...Ch. 3 - If a company has fixed costs of $6.000 per month...Ch. 3 - Company A wants to earn $5,000 profit in the month...Ch. 3 - A company has wants to earn an income of $60,000...Ch. 3 - A company has pre-tax or operating income of...Ch. 3 - When sales price increases and all other variables...
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