What are

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question

Abilene Industries manufactures and sells three products (XX, YY, and ZZ). The sales price and unit variable cost for the three products are as follows:

Their sales mix is reflected as a ratio of 4:2:1. Annual fixed costs shared by the three products are $345,000 per year.

  1. What are total variable costs for Abilene with their current product mix?
  2. Calculate the number of units of each product that will need to be sold in order for Abilene to break even.
  3. What is their break-even point in sales dollars?
  4. Using an income statement format, prove that this is the break-even point.
PB7. LO 3.4 Abilene Industries manufactures and sells three products (XX, YY, and ZZ). The
sales price and unit variable cost for the three products are as follows:
Product
XX
Sales Price
per Unit
$75
60
55
Variable Cost
per Unit
$45
25
15
ZZ
Their sales mix is reflected as a ratio of 4:2:1. Annual fixed costs shared by the three products
are $345,000 per year.
A. What are total variable costs for Abilene with their current product mix?
B. Calculate the number of units of each product that will need to be sold in order for
Abilene to break even.
C. What is their break-even point in sales dollars?
D. Using an income statement format, prove that this is the break-even point.
MacBook Air
Focus
Transcribed Image Text:PB7. LO 3.4 Abilene Industries manufactures and sells three products (XX, YY, and ZZ). The sales price and unit variable cost for the three products are as follows: Product XX Sales Price per Unit $75 60 55 Variable Cost per Unit $45 25 15 ZZ Their sales mix is reflected as a ratio of 4:2:1. Annual fixed costs shared by the three products are $345,000 per year. A. What are total variable costs for Abilene with their current product mix? B. Calculate the number of units of each product that will need to be sold in order for Abilene to break even. C. What is their break-even point in sales dollars? D. Using an income statement format, prove that this is the break-even point. MacBook Air Focus
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 3 steps with 3 images

Blurred answer
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education