Homework Help is Here – Start Your Trial Now!
Business
Accounting
City Pizza is adding salads and pasta dishes to their available menu items. The they will sell 1 order of pasta for every 12 pizzas and 2 salads for every pasta, resulting in a sales mix of 12:1:2. City Pizza has a total of $56, 700 in monthly fixed costs and provides the following data on selling price and variable cost per unit for the menu. The current operations have the capacity to produce 8000 units per month. Complete the tables below. Calculate the product breakeven units and dollars. Post a reply to this thread answering the following questions. If the store operates at 80% of capacity each month, review the potential profit calculated below. Explain how they might alter their sales mix to reduce the break-even number and increase the profits. Would you suggest an alteration to the sales mix, fixed costs

City Pizza is adding salads and pasta dishes to their available menu items. The they will sell 1 order of pasta for every 12 pizzas and 2 salads for every pasta, resulting in a sales mix of 12:1:2. City Pizza has a total of $56, 700 in monthly fixed costs and provides the following data on selling price and variable cost per unit for the menu. The current operations have the capacity to produce 8000 units per month. Complete the tables below. Calculate the product breakeven units and dollars. Post a reply to this thread answering the following questions. If the store operates at 80% of capacity each month, review the potential profit calculated below. Explain how they might alter their sales mix to reduce the break-even number and increase the profits. Would you suggest an alteration to the sales mix, fixed costs

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

Please make this question

City Pizza is adding salads and pasta dishes to their available menu items. They estimate that they will sell 1 order of pasta for every 12 pizzas and 2 salads for every pasta, resulting in a sales mix of 12:1:2. City Pizza has a total of $56, 700 in monthly fixed costs and provides the following data on selling price and variable cost per unit for the menu. The current operations have the capacity to produce 8000 units per month. Complete the tables below. Calculate the product breakeven units and dollars. Post a reply to this thread answering the following questions. If the store operates at 80% of capacity each month, review the potential profit calculated below. Explain how they might alter their sales mix to reduce the break-even number and increase the profits. Would you suggest an alteration to the sales mix, fixed costs or variable costs? Pizza $25.33 $10.97 $14.36 45% 80% $11.49 Pasta $9.99 %$3.50 $6.49 75% 6.67% $0.43 Salad $5.50 $2.97 $2.53 63% 13.33% $0.34 Factors Selling price per unit Variable cost per unit Contribution margin per unit Contribution margin ratio Sales Mix Ratio Weighted Average Contribution Margin Per Product WACM Dollars WACM Break-Even $12.26 463 Product Break-Even Point Units Product Break-Even Point Dollars 371 $9 397.43 31 $309.69 62 $341.00 Factors Pizza Pasta Salad Total Pizza $25.33 $10.97 $14.36 45% 80% $11.49 Pasta $9.99 $3.50 $6.49 75% 6.67% $0.43 Salad $5.50 $2.97 $2.53 63% 13.33% $0.34 Factors Selling price per unit Variable cost per unit Contribution margin per unit Contribution margin ratio Sales Mix Ratio Weighted Average Contribution Margin Per Product WACM Dollars WACM Break-Even $12.26 463 Product Break-Even Point Units Product Break-Even Point Dollars 371 $9 397.43 31 $309.69 62 $341.00 Factors Pizza Pasta Salad Total Sales Mix Units Sold Total Revenue Total Variable Costs (VC) Fixed Costs (FC) Total Costs Profit/Loss 80% 5120 129 689.60 56166.40 6.67% 427 4 265.73 1 494.50 13.33% 854 4697.00 2 536.38 100% 6400 138 652.33 60 197.28 56 700.00 116 897.28 21 755.05
Transcribed Image Text:City Pizza is adding salads and pasta dishes to their available menu items. They estimate that they will sell 1 order of pasta for every 12 pizzas and 2 salads for every pasta, resulting in a sales mix of 12:1:2. City Pizza has a total of $56, 700 in monthly fixed costs and provides the following data on selling price and variable cost per unit for the menu. The current operations have the capacity to produce 8000 units per month. Complete the tables below. Calculate the product breakeven units and dollars. Post a reply to this thread answering the following questions. If the store operates at 80% of capacity each month, review the potential profit calculated below. Explain how they might alter their sales mix to reduce the break-even number and increase the profits. Would you suggest an alteration to the sales mix, fixed costs or variable costs? Pizza $25.33 $10.97 $14.36 45% 80% $11.49 Pasta $9.99 %$3.50 $6.49 75% 6.67% $0.43 Salad $5.50 $2.97 $2.53 63% 13.33% $0.34 Factors Selling price per unit Variable cost per unit Contribution margin per unit Contribution margin ratio Sales Mix Ratio Weighted Average Contribution Margin Per Product WACM Dollars WACM Break-Even $12.26 463 Product Break-Even Point Units Product Break-Even Point Dollars 371 $9 397.43 31 $309.69 62 $341.00 Factors Pizza Pasta Salad Total Pizza $25.33 $10.97 $14.36 45% 80% $11.49 Pasta $9.99 $3.50 $6.49 75% 6.67% $0.43 Salad $5.50 $2.97 $2.53 63% 13.33% $0.34 Factors Selling price per unit Variable cost per unit Contribution margin per unit Contribution margin ratio Sales Mix Ratio Weighted Average Contribution Margin Per Product WACM Dollars WACM Break-Even $12.26 463 Product Break-Even Point Units Product Break-Even Point Dollars 371 $9 397.43 31 $309.69 62 $341.00 Factors Pizza Pasta Salad Total Sales Mix Units Sold Total Revenue Total Variable Costs (VC) Fixed Costs (FC) Total Costs Profit/Loss 80% 5120 129 689.60 56166.40 6.67% 427 4 265.73 1 494.50 13.33% 854 4697.00 2 536.38 100% 6400 138 652.33 60 197.28 56 700.00 116 897.28 21 755.05
Expert Solution
steps

Step by step

Solved in 2 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
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
SEE MORE TEXTBOOKS