Q8. Hansel and Gretel Confectioner Company produces two types of product; "chocolate" and "candy". At the end of 2018, a production plan related to these two products is being made. According to this plan, units sold, unit selling prices and unit variable costs for 2019 are expected as follows: Units sold Selling price (per kg) Unit variable cost Chocolate 20,000 kg $80 $20 Candy 30,000 kg $35 $10 Total fixed costs for 2019 is estimated as $780,000. Required: a) Provided that the sales mix mentioned above is not changed, what is the break-even point sales quantity for each product? b) What would be the profit at the sales level mentioned above? c) How many units of each product must be sold to earn a profit of $1,560,000?
Q8. Hansel and Gretel Confectioner Company produces two types of product; "chocolate" and "candy". At the end of 2018, a production plan related to these two products is being made. According to this plan, units sold, unit selling prices and unit variable costs for 2019 are expected as follows: Units sold Selling price (per kg) Unit variable cost Chocolate 20,000 kg $80 $20 Candy 30,000 kg $35 $10 Total fixed costs for 2019 is estimated as $780,000. Required: a) Provided that the sales mix mentioned above is not changed, what is the break-even point sales quantity for each product? b) What would be the profit at the sales level mentioned above? c) How many units of each product must be sold to earn a profit of $1,560,000?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Q8. Hansel and Gretel Confectioner Company produces two types of product; "chocolate" and "candy". At
the end of 2018, a production plan related to these two products is being made. According to this plan,
units sold, unit selling prices and unit variable costs for 2019 are expected as follows:
Chocolate
20,000 kg
$ 80
$ 20
Total fixed costs for 2019 is estimated as $780,000.
Units sold
Selling price (per kg)
Unit variable cost
Candy
30,000 kg
$35
$ 10
Required:
a) Provided that the sales mix mentioned above is not changed, what is the break-even point sales
quantity for each product?
b) What would be the profit at the sales level mentioned above?
c) How many units of each product must be sold to earn a profit of $1,560,000?
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