Question
The Caplan Chocolate Company makes two types of chocolate: traditional milk chocolate and white chocolate. The following table presents information about the companys cost structure
The Caplan Chocolate Company makes two types of chocolate: traditional milk chocolate and white chocolate. The following table presents information about the companys cost structure when 1,000 pounds of chocolate are produced. The table represents all costs associated with chocolate production.
| Overhead | Milk Chocolate | White Chocolate |
Sales price per pound |
| $8.00 | $9.50 |
Variable direct cost per pound |
| $3.00 | $3.75 |
Variable overhead | $1,100 |
|
|
Fixed overhead | $2,300 |
|
|
Assume 70% of sales are milk chocolate and 30% are white chocolate. Calculate how many pounds of chocolate would have to be sold to generate profits of $1,000.
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