Question
Kit Kitchen sells three types of soups: tomato basil, cheddar dill and loaded potato. The following table shows the sales price and variable cost for
Kit Kitchen sells three types of soups: tomato basil, cheddar dill and loaded potato. The following table shows the sales price and variable cost for each type. The restaurant incurs $200,000 a year in fixed costs. Assume that the restaurant has a sales mix of two tomato basil servings, two cheddar dill servings and one loaded potato serving.
| Type | Sales Price/u | Variable Cost/u | Contribution Margin/u |
| Tomato basil | $3.00 | $1.50 | $1.50 |
| Cheddar dill | $4.50 | $2.00 | $2.50 |
| Loaded potato | $4.50 | $2.50 | $2.00 |
How many servings (units) of each type will be sold at the breakeven point?
What amount of revenue ($) would need to be generated by each type of soup for the company to earn $25,000 in operating income?
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Auditing and Assurance Services
Authors: Timothy Louwers, Allen Blay, David Sinason, Jerry Strawser, Jay Thibodeau
7th edition
978-1259573286, 1259573281, 978-1260152166
