Question

please help me answer this by 10pm tonight. thank you!!

Hometown Bakery sells three types of doughnuts: glazed, jelly, and cake. The following table shows the sales price and variable costs for each type. The bakery incurs $343,000 a year in fixed expenses. Assume that it sells 4 glazed doughnuts for every 1 jelly doughnut and every 1 cake doughnut. DOUGHNUT TYPE SALES PRICE VARIABLE COST Glazed $0.35 $0.26 Jelly $0.57 $0.49 Cake $0.43 $0.27 (a) Your answer is incorrect. How many doughnuts of each type will be sold at the breakeven point? (Round intermediate calculations and final answers for the number of doughnuts to the nearest whole, e.g. 5,275.) Jelly doughnuts Cake doughnuts Glazed doughnuts

Answer 1

Solution

Glazed	2,286,667
Jelly	571,667
Cake	571,667

Alternate answer

Glazed	2,273,096
Jelly	576,756
Cake	576,756

Working

Working		Glazed	Jelly	Cake
A	Price	$               0.35	$       0.57	$       0.43
B	Variable Cost per unit	$               0.26	$       0.49	$       0.27
C = A - B	Contribution Margin	$               0.09	$       0.08	$       0.16
D	Product Mix	67%	17%	17%
E = C x D	Weighted Average Contribution Margin	$               0.06	$       0.01	$       0.03

.

A	Total Fixed Cost plus profit	$ 343,000.00
B	Weighted Average Contribution Margin	$               0.10
C = A/B	Multi Product Break Even point	3,392,681
C x 67%	Glazed	2,273,096
C x 17%	Jelly	576,756
C x 17%	Cake	576,756