Question

Mission Foods produces two flavors of tacos, chicken and fish, with the following characteristics: Chicken Fish Selling price per taco

$ 3.30 $ 4.60

Variable cost per taco 1.65 2.30

Expected sales (tacos) 209,000 299,000

The total fixed costs for the company are $116,000.

Required: a. What is the anticipated level of profits for the expected sales volumes?

b. Assuming that the product mix would be 37 percent chicken and 63 percent fish at the break-even point, compute the break-even volume. (In your computations, round up the total units to break-even to the nearest whole number and round other intermediate calculations to 2 decimal places. Round your final answers up to the nearest whole unit.)

c. If the product sales mix were to change to four chicken tacos for each fish taco, what would be the new break-even volume? (In your computations, round up the total units to break-even to the nearest whole number and round other intermediate calculations to 2 decimal places. Round your final answers up to the nearest whole unit.)

Answer 1