Si, Your Dinner! Mexican Food Company manufactures three strengths of salsa: Lightweight, Hot Stuff, and Burn Your Tongue. The selling prices and manufacturing costs of these salsas are as follows:

Selling price per jar $3.00 $4.00 $6.00 Manufacturing cost per jar 2.00 2.00 4.50 For every 10 jars sold, 3 are Lightweight, 3 are Hot Stuff, and 4 are Burn Your Tongue.
Required: (1) What is the contribution margin percentage per “unit”?
(2) By how much would profits change if a $1,000 advertising campaign increased the sales of Lightweight salsa by 900 jars but left sales of the other salsas unchanged?
(3) Sales are currently $10,125, and fixed costs total $2,125.

(a) How many jars of Lightweight salsa were sold?

(b) How many jars of Burn Your Tongue salsa were sold?

(c) What is the current pretax income?
(4) If the sales mix changes to 2 jars of Lightweight, 4 of Hot Stuff, and 4 of Burn Your Tongue, what would be the new contribution margin percentage? Lo1