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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 18,800 portable grills, 51,700 stationary grills, and 4,700 smokers. Information on the three models is as follows:
Portable | Stationary | Smokers | |
Price | $86 | $202 | $254 |
Variable cost | |||
per unit | 50 | 132 | 142 |
Total fixed cost is $2,205,900.
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. |
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