Question
Mission Foods produces two flavors of tacoschicken and fishwith the following characteristics. Chicken Fish Selling price per taco $ 3.20 $ 5.40 Variable cost per
Mission Foods produces two flavors of tacoschicken and fishwith the following characteristics. Chicken Fish Selling price per taco $ 3.20 $ 5.40 Variable cost per taco 1.60 2.70 Expected sales (tacos) 204,000 305,000 The total fixed costs for the company are $122,000.
Required:
a. What is the anticipated level of profits for the expected sales volumes?
b. Assuming that the product mix would be 41 percent chicken and 59 percent fish at the break-even point, compute the break-even volume using weighted-average contribution margin.
c. If the product sales mix were to change to four chicken tacos for each fish taco, what would be the new break-even volume?
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