Reference no: EM132669397

Questions -

Q1. Bando Corp. sells a single part for a price of $37 per unit. The variable costs of the part are $13 per unit and monthly fixed costs are $120,000.

Required:

a. What is the break-even level of monthly sales for Bando?

b. The cost analyst tells you that based on the price and cost information of the part and the marketing department's sales projection for next month, the margin of safety percentage is 20 percent. How many units does marketing expect to sell next month?

Q2. Mission Foods produces two flavors of tacos, chicken and fish, with the following characteristics:

Chicken Fish Selling price per taco $3.90 $5.00

Variable cost per taco 1.95 2.50

Expected sales (tacos) 209,000 305,000

The total fixed costs for the company are $111,000.

Required:

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

b. Assuming that the product mix would be 41 percent chicken and 59 percent fish at the break-even point, compute the break-even volume.

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?