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Multiple Product CVP Analysis: Hawaiian fruit pizza was a great success and Fairfield Pizza has decided to introduce a second pizza line, Aloha seafood pizza, in addition to Hawaiian fruit pizza. Its fixed costs will be increased to $27,000 for month. Aloha pizza is expect to sell at $35 each and its variable cost per pizza is $20. Fairfield pizza expects to sell 60% for Hawaiian fruit pizza and 40% for Aloha seafood pizza.

(1) What is unit contribution margin for Hawaiian fruit pizza and Aloha seafood pizza?

(2) What is the new breakeven in units and in sales dollar of each pizza?

(3) How many pizzas of each type must be sold to earn after tax profit of $21,600 when tax rate is 40%

Accounting Basics, Accounting

  • Category:- Accounting Basics
  • Reference No.:- M946000

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