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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: Sales Price Variable Cost Product per Unit per Unit AA $45 $25 BB 40 20 CC 30 10 Their sales mix is reflected as a ratio of 5:3:2. Annual fixed costs shared by the three products are $200,000 per year. A. What are total variable costs for Morris with their current product mix? Total variable costs $ B. Calculate 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 AA BB CC C. What is their break-even point in sales dollars? Break-even point in sales $ Feedback Check My Work A. Determine the composite sales price, variable cost, and contribution margin for each product. The total of the three composite amounts for contribution margin will be used to determine the amount of break-even units (using the total fixed costs). Once the break-even units are determined, use that amount times the composite variable cost to determine the total variable costs. B. Use the break-even units determined in Part A and the corresponding ratio for each product to determine the total number of units for each product. C. Use the break-even units for each product times the corresponding sales price to determine the sales dollars amount for each product. D. Using an income statement format, prove that this is the break-even point. If an amount is zero, enter "O". Income Statement Sales Product AA Product BB Product CC Total Sales Variable Costs Product AA $ Product BB Product cc Total Variable costs $ Contribution Margin $ Fixed Costs Net Income $ Feedback Check My Work D. Determine total sales and then factor in the variable and fixed cost elements using the calculated amounts done previously. With all amounts factored in, net income should be zero

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