Amount Descriptions Sales Mix and Breakeven Instructions Texas-Q Company produce
ID: 2572576 • Letter: A
Question
Amount Descriptions Sales Mix and Breakeven Instructions 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 18,000 portable grills, 45,000 stationary grill, and 4,500 smokers. Information on the three models is as follows: Portable Stationary Smokers Price Variable cost per unit $94 $200 $249 48 132 143 Total fixed cost is $2,124,300. Required 1. What is the sales mix of portable grillis 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. Comoute the marain of safetv for the coming vear Check My Work 3 more Check My Work uses remaining Previous NextExplanation / Answer
Sales Mix in units = 18000:45000:4500
= 4:10:1
sales mix in $ = 1692:9000:1120:11812.5
2. Breask even qty for each product = Total fixed cost / (Weighted avg. selling price - weighted avg. variable cost )
TOtal fixed cost = 2124300
Weighted avg. selling price = sales price of portable * sales % of portable +sales price of stationary * sales % of stationary + sales price of smokers*sales % of smokers
= 94*14.32% + 200*76.19%+249*9.49%
= 13.46+152.38+23.691
= 189.46
Weighted avg. variable expense = variable expense of portable * sales % of portable +variable expense of stationary * sales % of stationary + variable expense of smokers*sales % of smokers
= 48*14.32% + 132*76.19%+143*9.49%
= 6.87 + 100.57 + 13.56
= 121.01
Break even point = 2124300 / (189.46 - 121.01)
= 31033 units
so the co, will have to sell 31033 units to sell break even now i would compute the number of units of each prodcut to be sold =
portable = 31033*14.32% = 4445
stationary = 31033*76.19% = 23644
smokers = 31033*9.49% = 2944
3. computation of overall contribution margin ratio -
contribution margin ratio = 36.95%
Break even revenue = Break even qty.*sales price per unit
= 4445*94 + 23644*200 + 2944*249
= 417830 + 4728800 + 733056
= 5879686
3(b) income statment -
4. Margin of safety = TOtal sales - BEP sales
= 11812500 - 5879686
= 5932814.
Please note all values are in $.
In case of further clarificaiton required please comment.
output 18000 45000 4500 Portable stationary smokers Total selling price per unit 94 200 249 variable cost per unit 48 132 143 contribution margin per unit 46 68 106 Sales 1692000 9000000 1120500 11812500 Sales Mix % (Sales of individual category)/ total sales 14.32% 76.19% 9.49% 100.00%Related Questions
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