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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?

Respuesta :

Answer:

$1,059,050

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.

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