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:ProductSales Priceper UnitVariable Costper UnitAA$50 $25 BB45 10 CC30 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?

Variable costs are the costs that vary with the changes in the total output but it does not change…

Answered: Morris Industries manufactures and…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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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 Price per Unit	Variable Cost per 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?

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