Question
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.
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 13,800 portable grills, 50,600 stationary grills, and 4,600 smokers. Information on the three models is as follows:
Portable | Stationary | Smokers | |
Price | $92 | $198 | $255 |
Variable cost | |||
per unit | 48 | 131 | 139 |
Total fixed cost is $2,068,500.
2. Compute the break-even quantity of each product.
Break-Even Portable Grills | |
Break-Even Stationary Grills | |
Break-Even Smokers |
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 |
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.
Texas-Q Company |
Income Statement |
For the Coming Year
|
4. Compute the margin of safety for the coming year.
The margin of safety for the coming year is
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