Multiproduct Company produces 3 products. PRODUCT 1 PRODUCT 2 PRODUCT 3 Price/unit $5 $6 $7Variable cost/unit 3 2 4Expected Sales (units) 100,000 150,000 250,000 Total fixed costs for the company are $1,240,000. Prepare an Income Statement using the format used in class (and in the text for sales mix) for the 3 products above and the company as a whole. Assuming the product mix would be the same at the break-even point as above, compute the Break-even point in sales dollars.( use 3 decimal points to calculate CM% ie. .105 = 10.5%) Explain what would happen to the overall contribution ratio if we sold 50,000 units of Product 1, 300,000 units of Product 2, and the same units of Product 3?WHY Multiproduct Company produces 3 products.PRODUCT 1PRODUCT 2PRODUCT 3Price/unit$5$6$7Variable cost/unit4Expected Sales (units)100,000150,000250,000Total fixed costs for the company are $1,240,000.a) Prepare an Income Statement using the format used in class (and in the text for sales mix)for the 3 products above and the company as a whole. Assuming the product mix would bethe same at the break-even point as above, compute the Break-even point in sales dollars.( use 3 decimal points to calculate CM% ie. .105 = 10.5%)b) Explain what would happen to the overall contribution ratio if we sold 50,000 units ofProduct 1, 300,000 units of Product 2, and the same units of Product 3?WHY

Multiproduct Company produces 3 products. PRODUCT 1 PRODUCT 2 PRODUCT 3 Price/unit $5 $6 $7 Variable cost/unit 3 2 4 Expected Sales (units) 100,000 150,000 250,000 Total fixed costs for the company are $1,240,000. Prepare an Income Statement using the format used in class (and in the text for sales mix) for the 3 products above and the company as a whole. Assuming the product mix would be the same at the break-even point as above, compute the Break-even point in sales dollars. ( use 3 decimal points to calculate CM% ie. .105 = 10.5%) Explain what would happen to the overall contribution ratio if we sold 50,000 units of Product 1, 300,000 units of Product 2, and the same units of Product 3? WHY

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter2: Basic Managerial Accounting Concepts

Section: Chapter Questions

Problem 4MCQ

See similar textbooks

Related questions

Question

100%

Multiproduct Company produces 3 products.

PRODUCT 1 PRODUCT 2 PRODUCT 3

Price/unit $5 $6 $7

Variable cost/unit 3 2 4

Expected Sales (units) 100,000 150,000 250,000

Total fixed costs for the company are $1,240,000.

Prepare an Income Statement using the format used in class (and in the text for sales mix) for the 3 products above and the company as a whole. Assuming the product mix would be the same at the break-even point as above, compute the Break-even point in sales dollars.

( use 3 decimal points to calculate CM% ie. .105 = 10.5%)

Explain what would happen to the overall contribution ratio if we sold 50,000 units of Product 1, 300,000 units of Product 2, and the same units of Product 3?

WHY

Multiproduct Company produces 3 products.
PRODUCT 1
PRODUCT 2
PRODUCT 3
Price/unit
$5
$6
$7
Variable cost/unit
4
Expected Sales (units)
100,000
150,000
250,000
Total fixed costs for the company are $1,240,000.
a) Prepare an Income Statement using the format used in class (and in the text for sales mix)
for the 3 products above and the company as a whole. Assuming the product mix would be
the same at the break-even point as above, compute the Break-even point in sales dollars.
( use 3 decimal points to calculate CM% ie. .105 = 10.5%)
b) Explain what would happen to the overall contribution ratio if we sold 50,000 units of
Product 1, 300,000 units of Product 2, and the same units of Product 3?
WHY

Expert Solution

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

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.