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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 16,200 portable grills, 54,000 stationary grills, and 5,400 smokers. Information on the three models is as follows:

Portable

Stationary

Smokers

Price $88 $198 $248
Variable cost
per unit 43 128 142

Total fixed cost is $1,976,100.

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.

1) Compute the break-even quantity of each product.

Break-even portable grills: ___

Break-even stationary grills: ___

Break-even smokers: ___

2) 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) 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 using the following amount descriptions:

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

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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