Question

Hello! Can someone please help me solve this problem in a step by step solution?

THanks so much!

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 15,600 portable grills, 52,000 stationary grills, and 5,200 smokers. Information on the three models is as follows: Portable $93 Stationary $203 Smokers $249 Price Variable cost per unit R 50 130 144 Total fixed cost is $2,120,800. 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.

Answer 1

Answer 1 & 2

	Portable	Stationary	Smokers
Units Sold	15600	52000	5200
Sales Mix	3	10	1
Selling Price	93	203	249
Variable Cost	50	130	144
Contribution Margin	43	73	105
Weighted Average CM	9.21	52.14	7.50
Total Weighted Average CM (A)	68.86
Total Fixed Cost (B)	2120800
Combined Breakeven Point (B)/(A)	30,800
Breakeven Point Units	6600	22000	2200

Answer 3

	Portable	Stationary	Smokers	Total
Units Sold	15,600	52,000	5,200
Sales Revenue	14,50,800	1,05,56,000	12,94,800	1,33,01,600
Variable Cost	7,80,000	67,60,000	7,48,800	82,88,800
Contribution Margin	6,70,800	37,96,000	5,46,000	50,12,800
Fixed Cost				21,20,800
Net Operating Income				28,92,000
Contribution margin Ratio = Total Contribution Margin / Total Sales = 5012800 / 13301600 = 37.69%
Breakeven Sales ($) = Fixed Cost / CM (%) = 2120800 / 37.69% = 56,27,600
	Portable	Stationary	Smokers
Bifurcation of Sales	613800	4466000	547800

Answer 4

Total Sales for Coming Year	1,33,01,600
Breakeven Sales	56,27,600
Margin of Safety Sales ($)	76,74,000