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 14,700 portable grills, 53,900 stationary grills, and 4,900 smokers. Information on the three models is as follows:
Portable | Stationary | Smokers | |
---|---|---|---|
Price | $94 | $199 | $250 |
Variable cost | |||
per unit | 43 | 135 | 142 |
Total fixed cost is $2,026,500.
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? 2. Compute the break-even quantity of each product.
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.
|
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started