Reference no: EM132603679
Multiple-product profit analysis. Cisco's Sumptuous Burritos produces two burritos, chicken and steak, with the following characteristics:
Chicken Steak
Selling Price per Unit....................................................................................................... $4 $6
Variable Cost per Unit...................................................................................................... $2 $3
Expected Sales (units)..................................................................................................... 200,000 300,000
The total fixed costs for the company are $200,000.
Question a. What is the anticipated level of profits for the expected sales volumes?
Question b. Assuming that the product mix would be 40 percent chicken and 60 percent steak at the break-even point, compute the break-even volume.
Question c. If the product sales mix were to change to four chicken burritos for each steak burrito, what would be the new break-even volume?
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