Question

Mission Foods produces two flavors of tacos-chicken and fish with the following characteristics. $ Selling price per taco Variable cost per taco Expected sales (tacos) Chicken 3.80 1.90 198,00 5.10 2.55 295,000 The total fixed costs for the company are $118,000, Required: a. What is the anticipated level of profits for the expected sales volumes? b. Assuming that the product mix would be 42 percent chicken and 58 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? Complete this question by entering your answers in the tabs below. Required A Required B Required Assuming that the product mix would be 42 percent chicken and 58 percent fish at the break-even point, compute the break- even volume using weighted average contribution margin. (In your computations, round up the total units to break-even to the nearest whole number and round other intermediate calculations to 2 decimal places. Round your final answers up to the nearest whole unit.) Show less Break-even Volume

Answer 1

Ansuor: H@ -The antici pertiddeved of prafit for the expeted soles volume:: rofit = uni-ts sdd x (selling prec (sp) - variable cort (vo) - fixed cost L>0. - [98,00x (3.60 - 1-90]+[3+5,000 × (5.10-2 65 )- - 118,000 -L198, 000 x(1.9)]+ [29s,000 x ( 3. 55]- 118, 000 = 376,200+752,250 - 118,000 =$1,010,450- profit = $1,010,450 voleme O Compute break- Even weighted autrag contiluton mngh = (aught d pradust i x cnit contilbeton mayind padut 1) +laight d, product s xunit conti beten meng nd peducta} =(o.49 x $1.90)+C0.5BX$2155) 10.:798+ 1: 479 - $2.817

At break Even point, profit is $0. Let us lake, The break Even volume be x units. -fixed costs meagin contibu tion profit $0 = (f 3.277 * x)-118,000 $ 2. 277 * X 118,000 X = 51,823 units So, .'. brcak Even voume 51,823 unirls chicken = 51,823 unils x 42/. - a1766 urirts s1,823 uni ts x 581. fish = 30057 units. boeak Even voleeme lacas chicken 21766. fish tacos 30057

Let "x" be the units sold d fish units sold -or chicken -ux 4x * ( 3.80 - 1.90)+x*(5.10 - 2.25) = 1181000 . 7.6x+2,85x ='118:000 10.45 x = 1181000 118,000 10.45 X = 11292units. chicken - l1292 x4 = 45168 45168 taos. chicken. 11292 tacas. fish