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Mission Foods produces two flavors of tacoschicken and fishwith the following characteristics. Chicken Fish Selling price per taco $ 3.30 $ 4.80 Variable cost per
Mission Foods produces two flavors of tacoschicken and fishwith the following characteristics.
Chicken | Fish | |||||
Selling price per taco | $ | 3.30 | $ | 4.80 | ||
Variable cost per taco | 1.65 | 2.40 | ||||
Expected sales (tacos) | 208,000 | 309,000 | ||||
The total fixed costs for the company are $115,000.
Required:
a. What is the anticipated level of profits for the expected sales volumes?
b. Assuming that the product mix would be 40 percent chicken and 60 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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