Question

Mission Foods produces two flavors of tacos, chicken and fish, with the following characteristics:

Chicken Fish
Selling price per taco $ 3.90 $ 5.00
Variable cost per taco 1.95 2.50
Expected sales (tacos) 209,000 305,000
The total fixed costs for the company are $111,000.

What is the anticipated level of profits for the expected sales volumes?

Answer 1

$1,059,050

Step-by-step explanation:

The computation of the anticipated level of profits for the expected sales volumes is shown below:

Expected sales 209,000 305,000

Particulars Chicken Fish

Sales $815,100 $1,525,000

Less:

Variable cost -$407,550 -$762,500

Contribution margin $407,550 $762,500

Now the profit would be

= Total contribution margin - total fixed cost

= $407,550 + $762,500 - $111,000

= $1,059,050

The sales are variable cost are come by multiplying the units with its price per taco.