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exas-Q Company produces and sells barbeque grills. Texas-Q sells three models: a small portable gas grill, a larger stationary gas grill, and the specialty smoker.
exas-Q Company produces and sells barbeque grills. Texas-Q sells three models: a small portable gas grill, a larger stationary gas grill, and the specialty smoker. In the coming year, Texas-Q expects to sell 15,300 portable grills, 45,900 stationary grills, and 5,100 smokers. Information on the three models is as follows:
Portable | Stationary | Smokers | |
Price | $90 | $199 | $246 |
Variable cost | |||
per unit | 50 | 127 | 145 |
Total fixed cost is $1,868,350.
Required: | |
1. | What is the sales mix of portable grills to stationary grills to smokers? |
2. | Compute the break-even quantity of each product. |
3. | Prepare an income statement for Texas-Q for the coming year. What is the overall contribution margin ratio? Use the contribution margin ratio to compute overall break-even sales revenue. Enter the contribution margin ratio as a percentage rounded to two decimal places; round the break-even sales revenue to the nearest dollar. |
4. | Compute the margin of safety for the coming year. |
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