data related to the expected sales of two types of frozen pizzas for norfolk fro
ID: 2422544 • Letter: D
Question
data related to the expected sales of two types of frozen pizzas for norfolk frozen foods inc, for the current year, which is typical of recent years, are as follows:
products unit selling price unit variable cost sales mix
12" pizza 12$ 3$ 30%
16" pizza 15$ 4$ 70%
The estimated fixed costs for the current year are 46,800$
1/ determine the estimated units of sales of the overall (total) product, necessary to reach the break even point of the current year.
2/ based on the break even sales (units) in part 1, determne the unit sales of both the 12" pizza and 16" pizza for the current year
3/ assume that the sales mix was 50% for 12" pizza and 50% for 16" pizza. Compare the breakeven point with part 1. why is it so different?
Explanation / Answer
Answer:1
BEP (units)=Fixed cost/Contribution margin per unit
=$46800/10.4
=4500 units
Answer:2
Answer:3
BEP (units)=Fixed cost/Contribution margin per unit
=$46800/10
=4680 units
Because Sales mix is different.
Products Sale Mix unit selling price Unit variable cost unit contribution margin Total contribution 12" Pizza 30% 12 3 9 2.7 16" Pizza 70% 15 4 11 7.7 10.4Related Questions
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