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Pies Galore Ltd makes two types of meat pies: Spicy Chicken pies (selling for $8 each) and Curry Lamb pies (selling for $12 each). The
Pies Galore Ltd makes two types of meat pies: Spicy Chicken pies (selling for $8 each) and Curry Lamb pies (selling for $12 each). The marketing department has predicted that Pies Galore can sell 680,000 pies during the coming year, with sales mix of the pies will be 45.0% for Spicy Chicken pies and 55.0% for Curry Lamb pies. The accountant has prepared the following projected income statement based on the sales forecast. Part 1: Calculate variable cost per unit for Pies Galore's two product lines: Spicy Chicken and Curry Lamb (2 marks) Spicy Chicken Pies - variable cost per unit: 5 Curry Lamb Pies - variable cost per unit: 5 Part 2: Calculate Contribution Margin per unit of Spicy Chicken and Curry Lamb ( 2 marks) Spicy Chicken Pies CM per unit:\$ Curry Lamb Pies CM per unit: $ Part 3: Calculate weighted average contribution margin per unit ( 2 marks) Please round to 2 decimal places. Weighted average CM per unit: $ Part 4: Calculate the total number of pies Pies Galore has to sell to breakeven. ( 2 marks) Please round to a whole number. BEP total: Part 5: Calculate the total number of Spicy Chicken and Curry Lamb pies Pies Galore has to sell to breakeven. ( 2 marks) Please round to a whole number. Number of Spicy Chicken Pies: Number of Curry Lamb Pies: Part 6: The CEO of Pies Galore would like to determine the number of Spicy Chicken and Curry Lamb pies Pies Galore has to sell to achieve a targeted after-tax profit of $600,000. Assume that the tax rate is 25.0%. (3 marks) Please round to a whole number. Number of Spicy Chicken Pies: Number of Curry Lamb Pies: Part 7: Calculate margin of safety. (2 marks) Please round to a whole number
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