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Mission Foods produces two flavors of tacos-chicken and fish-with the following characteristics.
Chicken Fish
Selling price per taco $3.30 $4.50
Variable cost per taco 1.65 2.25
Expected sales (tacos) 206,000 303,000
The total fixed costs for the company are $114,000.
Required:
Question a. What is the anticipated level of profits for the expected sales volumes?
Question b. Assuming that the product mix would be 36 percent chicken and 64 percent fish at the break-even point, compute the break-even volume using weighted-average contribution margin.
Question 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?
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