Texas-Q Company produces and sells barbeque grills. Texas-Q sells three models: a small portable gas grill, a larger stationary gas grill, and the specialty smoker. In the coming year, Texas-Q expects to sell 13,500 portable grills, 49,500 stationary grills, and 4,500 smokers. Information on the three models is as follows:

	Portable	Stationary	Smokers
Price	$87	$196	$253
Variable cost
per unit	48	127	138

Total fixed cost is $2,130,650.

3(a) What is the overall contribution margin ratio? Use the contribution margin ratio to compute overall break-even sales revenue. Enter the contribution margin ratio as a percentage rounded to two decimal places; round the break-even sales revenue to the nearest dollar.

Contribution Margin Ratio	%
Break-Even Revenue

Texas-Q Company produces and sells barbeque grills. Texas-Q sells three models: a small portable gas grill, a larger stationary gas grill, and the specialty smoker. In the coming year, Texas-Q expects to sell 13,500 portable grills, 49,500 stationary grills, and 4,500 smokers. Information on the three models is as follows:

	Portable	Stationary	Smokers
Price	$87	$196	$253
Variable cost
per unit	48	127	138

Total fixed cost is $2,130,650.

	Required:
1.	What is the sales mix of portable grills to stationary grills to smokers?
2.	Compute the break-even quantity of each product.
3.	Prepare an income statement for Texas-Q for the coming year. What is the overall contribution margin ratio? Use the contribution margin ratio to compute overall break-even sales revenue. Enter the contribution margin ratio as a percentage rounded to two decimal places; round the break-even sales revenue to the nearest dollar.
4.	Compute the margin of safety for the coming year.

X

Amount Descriptions

Refer to the list below for the exact wording of text items within your income statement.

Amount Descriptions
Operating income
Operating loss
Sales
Total contribution margin
Total fixed cost
Total variable cost

X

Sales Mix and Breakeven

Shaded cells have feedback.

1. What is the sales mix of portable grills to stationary grills to smokers? 3:11:1

Points:

1 / 1

2. Compute the break-even quantity of each product.

Break-Even Portable Grills
Break-Even Stationary Grills
Break-Even Smokers

Points:

3 / 3

Feedback

Check My Work

1. See text section "Determining the Sales Mix."

3(a) What is the overall contribution margin ratio? Use the contribution margin ratio to compute overall break-even sales revenue. Enter the contribution margin ratio as a percentage rounded to two decimal places; round the break-even sales revenue to the nearest dollar.

Contribution Margin Ratio	%
Break-Even Revenue

Points:

0 / 2

Feedback

Check My Work

Divide total contribution margin by sales. Divide fixed costs by contribution margin ratio.

X

Contribution Margin Income Statement

Shaded cells have feedback.

3(b) Prepare an income statement for Texas-Q for the coming year. Refer to the list of Amount Descriptions for the exact wording of text items within your income statement.

Question not attempted.

Score: 0/51

Texas-Q Company

Income Statement

For the Coming Year

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4. Compute the margin of safety for the coming year.

The margin of safety for the coming year is .