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Mission Foods produces two flavors of tacos, chicken and fish, with the following characteristics:    Chicken FishSelling price per taco$3.40 $5.50 Variable...

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Accounting

Mission Foods produces two flavors of tacos, chickenand fish, with the following characteristics:


 


 Chicken FishSelling price pertaco$3.40 $5.50 Variable cost pertaco 1.70  2.75 Expected sales(tacos) 195,000  291,000 

 


The total fixed costs for the company are$124,000.


 


Required:

 


b. Assuming that the product mix would be36 percent chicken and 64 percent fish at the break-even point,compute the break-even volume. (In your computations, roundup the total units to break-even to the nearest whole number andround other intermediate calculations to 2 decimal places. Round your final answers up to the nearest wholeunit.)


 


Answer & Explanation Solved by verified expert
3.7 Ratings (507 Votes)

product mix percentage Contribution margin per unit weighted average contribution margin
Chicken 36% $3.40 - $1.70 = $1.70 $1.70 * 36% = $0.61
Fish 64% $5.50 - $2.75 = $2.75 $2.75 * 64% = $1.76
Weighted average contribution margin $                              2.37
Total Break even sales in units = Fixed costs / Contribution margin
Total Break even sales in units = $124,000 / $2.37
Total Break even sales in units = 52,320.68
Sales Mix Total Break even sales in units Break-even units
Chicken 36%                52,320.68                            18,835
Fish 64%                52,320.68                            33,485

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