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