Question

Morris Industires manufactures and sells three products (AA, BB, and CC). The sales price and unit variable cost for the three products are as follows:

M .doinvokerStake AssignmentsessionLocatoreBinprogress of eBook Calculator Print Item 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: Sales Price Variable Cost Product per Unit per Unit NA $50 $35 35 10 CC 25 Their sales mix is reflected as a ratio of 5:32. Annual fixed costs shared by the three products are $170,000 per year, A. What are total variable costs for Morris with their current product mix? Total variable costs X B. culate the number of units of each product that will need to be sold in order for Morris to break even Number of Units per Product c. What is their break-even point in sales dollars? Break-even point in sales Previous Next Check My Work

Answer 1

Answer: Given that Sales min - 5:3:2 Total Annual fixed cost of three produs - legen calculation of contribution per product contribution Product 15 AA sales price variable cost $50 $35 $35 $10 $25 425 BB cc 810 815 composite contăbution per unit by taking Weights for the product eases mix Ratio prodent-AA = $15x = 2 = $75 produit - BR - $268.3 - $75 product acc = $ 10x 2 = 42 $17 Composite Break-even point Common Fixed cost composite contribution per unit $1,70,000 $17 - $10,000 w2020-2-2

Break even units of product - AA 10,000x5 5,000 prodent BB a 10,000x 3 - 3,000 prodius.cc - 19000 x 2 - 2,000 7 Break Eren point in sales dollars for los product-AA = 5000 y $150/2,50,000 Prodent-BB - 3,00bx 435 $1,05000 product-cao 2,0008 $25-850,000 Evey point : Income statemeur at Break sales : produt AA - $2,50000 $1,05000 product BB = $50,000 product cc = $405000 I Total sales variable costs poodut AA = $.1,75,000 (5000x $35) produer BB = $ 30,000 (3,000x $10) = $30,000 prodent rc (2000 x $15) $ 2,35,000 Total variable costs $1,70,000 contribution Margin .. Freed costs $ 1,70,000 Net Income 2020-2

A - o Toral variable costs for Morris with their Current produnt MP: product AA - $35x5,000 - $1,15,000 s produt-BB = $ 10x3000 430000 or product-cc = $15x 2,000 = $39000 70tal vasiable costs > $2,35.000 2 L 2020-2-24 22:59