Donnie's Donuts sells three types of donuts: sugar-glazed, cream-filled and giant-sized.The following table shows the sales price and variable cost for each type.Donnie's incurs $216,000 a year in fixed costs.Assume that the store has a sales mix of three sugar-glazed, two cream-filled, and one giant-sized. Required:
a.How many donuts of each type will be sold at the breakeven point?
b.What amount of revenue would need to be generated by each type of donut for the company to earn $36,000 in operating income?

Question

Donnie's Donuts sells three types of donuts: sugar-glazed, cream-filled and giant-sized.The following table shows the sales price and variable cost for each type.Donnie's incurs $216,000 a year in fixed costs.Assume that the store has a sales mix of three sugar-glazed, two cream-filled, and one giant-sized.  Required: 
a.How many donuts of each type will be sold at the breakeven point?
b.What amount of revenue would need to be generated by each type of donut for the company to earn $36,000 in operating income?

Quizplus · Accepted Answer

The Answer of Donnie's Donuts sells three types of donuts: sugar-glazed, cream-filled and giant-sized.The following table shows the sales price and variable cost for each type.Donnie's incurs $216,000 a year in fixed costs.Assume that the store has a sales mix of three sugar-glazed, two cream-filled, and one giant-sized.  Required: 
a.How many donuts of each type will be sold at the breakeven point?
b.What amount of revenue would need to be generated by each type of donut for the company to earn $36,000 in operating income?

Donnie's Donuts Sells Three Types of Donuts: Sugar-Glazed, Cream-Filled and Giant-Sized.The