Compute the break-even quantity of each product

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Reference no: EM131989462

Problem

Texas-Q Company produces and sells barbeque grills. Texas-Q sells three models: a small portable gas grill, a larger stationary gas grill, and the specialty smoker. In the coming year, Texas-Q expects to sell 13,500 portable grills, 40,500 stationary grills, and 4,500 smokers. Information on the three models is as follows:

	Portable	Stationary	Smokers
Price	$93	$203	$245
Variable cost per unit	46	132	136

Required:

1. What is the sales mix of portable grills to stationary grills to smokers?

2. Compute the break-even quantity of each product.

3. Prepare an income statement for Texas-Q for the coming year. What is the overall contribution margin ratio? Use the contribution margin ratio to compute overall break-even sales revenue. Enter the contribution margin ratio as a percentage rounded to two decimal places; round the break-even sales revenue to the nearest dollar.

4. Compute the margin of safety for the coming year

Reference no: EM131989462

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