Death by Chocolate sells specialty fudge in three flavors: Marshmallow, Plain, and Peanut. They sold 10,000 pounds last year. For every five pounds of fudge sold, one pound is Marshmallow and the remainder is split evenly between Plain and Peanut. Fixed costs for Death by Chocolate are $24,000 and additional information follows: (10 marks, 2.5 marks each)

	Marshmallow	Plain	Peanut
Sales price per pound	$10.00	$8.00	$12.00
Variable cost per pound	$6.00	$5.00	$9.00

A) The sales mix percentage at Death by Chocolate of Peanut based upon pounds is

A) 22%.

B) 40%.

C) 75%.

D) 20%.

Answer:

B) The weighted average contribution margin per pound for the three products of Death by Chocolate is

A) $3.20.

B) $80.00.

C) $16.80.

D) $1.40.

Answer:

C) The break-even sales volume in pounds for Death by Chocolate is

A) 4,800.

B) 1,429.

C) 7,500.

D) 3,125.

Answer:

D) Break-even sales in dollars for Death by Chocolate is

A) $14,286.

B) $31,250.

C) $30,000.

D) $75,000.