Neutron Food Products produces two different types of snack bar: Granola bars and carob bars. Neutron sells these bars by the case to local retail outlets. Granola bars sell for $30 a case whereas carob bars sell for $20 a case. The projected income statement for the coming three months is as follows:

Neutron Food Products Projected Income Statement For the Quarter Ended 31 March 20X3 Sales $ 600,000 Less: Variable costs 400,000 Contribution margin 200,000 Less: Fixed costs 120,000 Net income $ 80,000

Neutrons owner-manager expects granola bars to generate 60 per cent of the projected sales revenue. Carob bars will account for the remaining 40 per cent. Granola bars will also be responsible for 60 per cent of the variable costs incurred. All of the fixed costs are common to both products.

Required: (a) How many cases of granola bars does the Neutron Food Products expect to sell during the quarter?

(b) How many cases of carob bars does Neutron Food Products expect to sell during the quarter?

(c) Compute the contribution margin per case for granola bars and the contribution margin per case for carob bars.

(d) How many cases of granola bars and how many cases of carob bars must Neutron Food Product sell during the quarter ended 31 March 20X3 to break even?

(e) Express the margin of safety in cases of granola and carob bars sold, dollar sales revenue and as a percentage.

(f) Compute Neutron Food Products magnitude of operating advantage. Assume actual sales revenue for the coming quarter will be 20 per cent higher than the projected sales revenue. By what percentage will profits increase given this increase in sales?