ABC Inc. manufactures and sells three products (A, B, and C). The sales price and unit variable cost for the three products are as follows: Sales Price Variable Cost e Product per Unite per Unite $50 $30- 40 15e 30 10 Their sales mix is reflected as a ratio of 5:3:2. Annual fixed costs shared by the three products are $258, 000 per year. e 1. Calculate the number of units of each product that will need to be sold in order for ABC to break even. 2. What is their break-even point in sales dollars? 3. Using an income statement format, prove that this is the break- even point. «

Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter3: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 17MC: Waskowski Company sells three products (A. B. and C) with a sales mix of 3:2:1. Unit sales price are...
icon
Related questions
icon
Concept explainers
Question
ABC Inc. manufactures and sells three products (A, B, and C). The
sales price and unit variable cost for the three products are as
follows:
Sales Price
Variable Cost
Product
per Unit-
per Unit?
A
$50
$30
B
404
15
30
10<
Their sales mix is reflected as a ratio of 5:3:2. Annual fixed costs
shared by the three products are $258, 000 per year.
1. Calculate the number of units of each product that will need to
be sold in order for ABC to break even.
2. What is their break-even point in sales dollars?
3. Using an income statement format, prove that this is the break-
even point.
Transcribed Image Text:ABC Inc. manufactures and sells three products (A, B, and C). The sales price and unit variable cost for the three products are as follows: Sales Price Variable Cost Product per Unit- per Unit? A $50 $30 B 404 15 30 10< Their sales mix is reflected as a ratio of 5:3:2. Annual fixed costs shared by the three products are $258, 000 per year. 1. Calculate the number of units of each product that will need to be sold in order for ABC to break even. 2. What is their break-even point in sales dollars? 3. Using an income statement format, prove that this is the break- even point.
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 4 steps

Blurred answer
Knowledge Booster
Cost volume profit (CVP) analysis
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Principles of Accounting Volume 2
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College
Cornerstones of Cost Management (Cornerstones Ser…
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning
Managerial Accounting
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
EBK CONTEMPORARY FINANCIAL MANAGEMENT
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:
9781337514835
Author:
MOYER
Publisher:
CENGAGE LEARNING - CONSIGNMENT
Survey of Accounting (Accounting I)
Survey of Accounting (Accounting I)
Accounting
ISBN:
9781305961883
Author:
Carl Warren
Publisher:
Cengage Learning
Managerial Accounting: The Cornerstone of Busines…
Managerial Accounting: The Cornerstone of Busines…
Accounting
ISBN:
9781337115773
Author:
Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:
Cengage Learning