Question: Microsoft is evaluating its product lines: Windows OS, Office Suite, and Surface devices. The financial data for the year is as follows: Windows OS: Sales

  1. Microsoft is evaluating its product lines: Windows OS, Office Suite, and Surface devices. The financial data for the year is as follows:
    • Windows OS: Sales Units - 40,000, Sales Price per Unit - $150, Variable Cost per Unit - $70, Fixed Cost - $2,000,000
    • Office Suite: Sales Units - 30,000, Sales Price per Unit - $200, Variable Cost per Unit - $100, Fixed Cost - $3,000,000
    • Surface: Sales Units - 20,000, Sales Price per Unit - $800, Variable Cost per Unit - $500, Fixed Cost - $5,000,000 Requirements:
    • Construct the Income Statement for each product.
    • Determine the Contribution Margin per unit for each product.
    • Calculate the Break-Even Point in units and dollars for each product.
    • Evaluate the profitability of each product line.

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