Morgan Company produces two products, G and H, with the following characteristics: Total fixed costs for the year are expected to be $700,000.
a) What will be the net income if the forecast sales are realized?
b) Determine the break-even volumes of the two products. Assume that the product mix (that is, the ratio of the unit sales for the two products) remains the same at the break-even point.
c) If it turns out that Morgan sells twice as many units of H as of G, what will be the break-even volumes of the two products?

Question

Morgan Company produces two products, G and H, with the following characteristics:  Total fixed costs for the year are expected to be $700,000.
a) What will be the net income if the forecast sales are realized?
b) Determine the break-even volumes of the two products. Assume that the product mix (that is, the ratio of the unit sales for the two products) remains the same at the break-even point.
c) If it turns out that Morgan sells twice as many units of H as of G, what will be the break-even volumes of the two products?

Quizplus · Accepted Answer

The Answer of Morgan Company produces two products, G and H, with the following characteristics:  Total fixed costs for the year are expected to be $700,000.
a) What will be the net income if the forecast sales are realized?
b) Determine the break-even volumes of the two products. Assume that the product mix (that is, the ratio of the unit sales for the two products) remains the same at the break-even point.
c) If it turns out that Morgan sells twice as many units of H as of G, what will be the break-even volumes of the two products?

Morgan Company Produces Two Products, G and H, with the Following