Question

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 14,700 portable grills, 53,900 stationary grills, and 4,900 smokers. Information on the three models is as follows:

	Portable	Stationary	Smokers
Price	$94	$199	$250
Variable cost
per unit	43	135	142

Total fixed cost is $2,026,500.

	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? 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. 1. What is the sales mix of portable grills to stationary grills to smokers? 2. Compute the break-even quantity of each product. Break-Even Portable Grills Break-Even Stationary Grills Break-Even Smokers 3(a) 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. Contribution Margin Ratio % Break-Even Revenue 3(b) Prepare an income statement for Texas-Q for the coming year. Refer to the list of Amount Descriptions for the exact wording of text items within your income statement. Texas-Q Company Income Statement For the Coming Year 1 2 3 4 5 4. Compute the margin of safety for the coming year. The margin of safety for the coming year is .

Answer 1