(Answered) Question contribution margin ratio break-even sales revenue

Accounting

Question: Contribution Margin Ratio, Break-Even Sales Revenue, and Margin of Safety for Multiple-Product Firm 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 20,000 portable grills, 50,000 stationary grills, and 5,000 smokers. Information on the three models is as follows:

Probable Stationary Smokers

Price $90 $200 $250

Variables cost per unit 45 130 140

Total fixed cost is $2,128,500.

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? The overall break-even sales revenue?

4. Compute the margin of safety for the coming year.

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