Mission Foods produces two flavors of tacos, chicken and fish, with the followin
ID: 2337427 • Letter: M
Question
Mission Foods produces two flavors of tacos, chicken and fish, with the following characteristics: ish Selling price per taco Variable cost per taco Expected sales (tacos) $ 3.00 S4.50 2.25 200,000 300,000 1.50 The total fixed costs for the company are $117,000 Required a. What is the anticipated level of profits for the expected sales volumes? Profit b. Assuming that the product mix would be 40 percent chicken and 60 percent fish at the break-even point, compute the break-even volume Round intermediate calculations to 2 decimal places. Break-even Volume tacos Chicken tacos FishExplanation / Answer
(a) Profit = Units sold * (SP – VC) – Fixed cost
[200000 * (3 – 1.50)] + [300000 * (4.50 – 2.25)] – 117000 = $858000
(b) Let “X” be the total units sold
Units sold of chicken = 0.40X
Units sold of Fish = 0.60X
[0.40X * (3 – 1.50)] + [0.60X * (4.50 – 2.25)] = 117000
0.60X + 1.35X = 117000
X = 60000 units
Chicken (60000 * 0.40)
24000 units
Fish (60000 * 0.60)
36000 units
(C) Let “X” be the units sold of fish
Units sold for chicken = 4X
[ 4X * (3 – 1.50)] + [X * (4.50 – 2.25)] = 117000
6X + 2.25X = 117000
X = 14182 units
Chicken (14182 * 4)
56728 units
Fish
14182 units
Chicken (60000 * 0.40)
24000 units
Fish (60000 * 0.60)
36000 units