Sales Mix and BreakEven Sales Data related to the expected s

Sales Mix and Break-Even Sales Data related to the expected sales of two types of frozen pizzas for Norfolk Frozen Foods Inc. for the current year, which is typical of recent years, are as follows: Products Unit Selling Price Unit Variable Cost 12 Pizza 16\" Pizza The estimated fixed costs for the current year are $46,800 Required: Sales Mix 30% 70% s 12 $3 15 1. Determine the estimated units of sales of the overall (total) product, E, necessary to reach the break-even point for the current year units 2. Based on the break-even sales (units) in part (3), determine the unit sales of both the 12\" pizza and 16\" pizza for the current year 12\" pizza 16 pizza 3 Assume that the sales mix was S0% 12\" pizza and 50% 16\" pizza Compute the break-even paint of the overa\" tota product E units units

Solution

1. Break-even point (overall): 4500 units

2. Break-even sales (units)

3. Break-even point (overall): 4680 units

Products	Sales Mix	Unit Selling Price		Total per composite unit
12\" Pizza	30%	$12		$3.60
16\" Pizza	70%	$15		$10.50
				$14.10
Products	Sales Mix	Unit Variable Cost		Total per composite unit
12\" Pizza	30%	$3		$0.90
16\" Pizza	70%	$4		$2.80
				$3.70
Contribution margin per composite unit
Unit Selling Price		$14.10
Less: Unit Variable Cost		$ 3.70
Contribution margin		$10.40
Choose Numerator:	/	Choose Denominator	=	Break-Even Units
Total fixed costs	/	Contribution margin per unit	=	Break-Even Units
$46,800	/	$10.40	=	4500	composite units