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 14,100 portable grills, 42,300 stationary grills, and 4,700 smokers. Information on the three models is as follows:

	Portable	Stationary	Smokers
Price	$87	$202	$249
Variable cost
per unit	46	135	138

Total fixed cost is $1,799,550.

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. What is the sales mix of portable grills to stationary grills to smokers? 3:9:1

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

Break-Even Portable Grills 6,450
Break-Even Stationary Grills 19,350
Break-Even Smokers 2,150

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.

Question not attempted.

Score: 0/51

Texas-Q Company

Income Statement

For the Coming Year

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2
3
4
5

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

The margin of safety for the coming year is. $