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Cost Accounting- if anyone can help that would be greatly appreciated Doug recently started selling tacos. During a typical month, he reports a net income
Cost Accounting- if anyone can help that would be greatly appreciated Doug recently started selling tacos. During a typical month, he reports a net income of $9,000 with sales of $42,000, fixed costs of $16,000, and variable costs of $0.40 per taco. The tax rate is 25%. Next year, he wants to sell fried churros for $1.5 per unit. Fried churros will have a variable cost of $0.80 and new equipment to fry the churros will increase monthly fixed costs by $2,000. Initial sales of fried churros should total approximately 16,000 units. Most of the churro sales are anticipated to come from current taco purchasers, therefore, monthly sales of tacos are expected to decline to $26,000. After the first year of fried churro sales, the sales people believe that taco sales will approximate $30,000 and fried churro sales should approximate 20,000 units. Required: a. Determine the monthly breakeven sales in dollars before adding fried churros. b. Determine the monthly breakeven sales during the first year of fried churros sales, assuming a constant sales mix of 1 taco and 2 units of fried churros. c. Doug wants to know which product he should concentrate on selling. What would you tell him and why
Cost Accounting- if anyone can help that would be greatly appreciated
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