Joseph Co Has Three Products A, B, and C, and Its

question 168

Essay

Joseph Co. has three products A, B, and C, and its fixed costs are $69,000. The sales mix for its products are 3 units of A, 4 units of B, and 1 unit of C. Information about the three products follows: $\begin{array}{lrrr}&A&B&C\\\text { Projected sales in dollars } &\$ 192,000& \$ 192,000&\$ 64,000\\\text { Selling price per unit } & \$ 40 & \$ 30 & \$ 40 \\\text { Contribution margin ratio } & 30 \% & 35 \% & 35 \%\end{array}$
(a) Calculate the company's break-even point in composite units and sales dollars.
(b) Calculate the number of units of each individual product to be sold at the break-even point.

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Definitions:

Adjusted Trial Balance

The trial balance prepared after all the adjusting entries have been posted.

Financial Statements

The formal records of the financial activities and position of a business, person, or other entity, typically including the balance sheet, income statement, and cash flow statement.

Plant Asset

Long-term tangible assets used in the operation of a business and not intended for resale.

Current Liabilities

Liabilities that will be due within a short time (usually one year or less) and that are to be paid out of current assets.