Mission Foods produces two flavors of tacos, chicken and fish, with the following characteristics:
Chicken Fish
Selling price per taco $3.00 $4.50
Variable cost per taco 1.50 2.25
Expected sales (tacos) 200,000 300,000
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The total fixed costs for the company are $117,000.
Required:
(a) What is the anticipated level of profits for the expected sales volumes?
(b) Assuming that the product mix would be 40 percent chicken and 60 percent fish at the break-even point, compute the break-even volume.
(c) If the product sales mix were to change to four chicken tacos for each fish taco, what would be the new break-even volume? (Round up your Break-Even Volume to the nearest whole unit.)