Mission Foods produces two flavors of tacos—chicken and fish—with the following characteristics. Chicken Fish Selling price per taco $ 3.40 $ 4.50 Variable cost per taco 1.70 2.25 Expected sales (tacos) 201,000 300,000 The total fixed costs for the company are $116,000. Required: a. What is the anticipated level of profits for the expected sales volumes? b. Assuming that the product mix would be 43 percent chicken and 57 percent fish at the break-even point, compute the break-even volume using weighted-average contribution margin. c. If the product sales mix were to change to four chicken tacos for each fish taco, what would be the new break-even volume?
Mission Foods produces two flavors of tacos—chicken and fish—with the following characteristics. Chicken Fish Selling price per taco $ 3.40 $ 4.50 Variable cost per taco 1.70 2.25 Expected sales (tacos) 201,000 300,000 The total fixed costs for the company are $116,000. Required: a. What is the anticipated level of profits for the expected sales volumes? b. Assuming that the product mix would be 43 percent chicken and 57 percent fish at the break-even point, compute the break-even volume using weighted-average contribution margin. c. If the product sales mix were to change to four chicken tacos for each fish taco, what would be the new break-even volume?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Mission Foods produces two flavors of tacos—chicken and fish—with the following characteristics.
| Chicken | Fish | |||||
| Selling price per taco | $ | 3.40 | $ | 4.50 | ||
| Variable cost per taco | 1.70 | 2.25 | ||||
| Expected sales (tacos) | 201,000 | 300,000 | ||||
The total fixed costs for the company are $116,000.
Required:
a. What is the anticipated level of profits for the expected sales volumes?
b. Assuming that the product mix would be 43 percent chicken and 57 percent fish at the break-even point, compute the break-even volume using weighted-average contribution margin.
c. If the product sales mix were to change to four chicken tacos for each fish taco, what would be the new break-even volume?
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