Mission Foods produces two flavors of tacos, chicken and fish, with the followin
ID: 2411787 • Letter: M
Question
Mission Foods produces two flavors of tacos, chicken and fish, with the following characteristics: Chicken Fish 4.60 selling price per s 3.70 taco Variable cost per taco Expected sales (tacos) 8,30 1.85 2.304.1 191,000 291,000 lReM) Fisk Chiken 29 l, 4.10 The total fixed costs for the company are $111,000. 145, 500 1 x,55 Required: a. What is the anticipated level of profits for the expected sales volumes? Profit 130,podo h. Aseuming that the product mix would be 45 percent chicken and 55 percent fish at the break-even poExplanation / Answer
Answer- 1:
Calculation of anticipated level of profit for the expected sales volumes of Mission Foods:
Mission Food
Chicken
Fish
Total
Sales Revenue (Expected Sales * Price Per unit)
706700
1338600
2045300
Less: Variable Costs (Expected Sales * Variable Cost per unit)
-353350
-669300
-1022650
Contribution Margin
353350
669300
1022650
Less: Fixed Cost
-111000
Expected Profit
911650
Answer-2:
a) Schedule showing impact of providing 500 sandwiches in addition to regular sales on MTA’s profits:
MTA Sandwiches
Status Quo
Alternative 18,500 units
Difference
Sales Revenue
18000 * 3.25
58500
(18000*3.25) + (500*2.35)
59675
1175
Less: Variable Costs
- Materials
18000*1.20
-21600
18500*1.20
-22200
-600
- Labour
18000*0.20
-3600
18500*0.20
-3700
-100
- Variable overhead
18000*0.20
-3600
18500*0.20
-3700
-100
Contribution Margin
29700
30075
375
Less: Fixed Cost
-16200
-16200
0
Net Profit
13500
13875
375
b) Lowest price at which MTA Sandwiches can fulfil the special order without reducing its current profits will be equal to variable cost required to deliver each sandwich:
= $ 1.20 (Material) + $ 0.20 (Labour) + $ 0.20 (Variable Overhead)
= $ 1.60 per sandwich
PLEASE, Rate the solution if it's helpful too you .....
Mission Food
Chicken
Fish
Total
Sales Revenue (Expected Sales * Price Per unit)
706700
1338600
2045300
Less: Variable Costs (Expected Sales * Variable Cost per unit)
-353350
-669300
-1022650
Contribution Margin
353350
669300
1022650
Less: Fixed Cost
-111000
Expected Profit
911650