Debbie's Kitchen sells three types of soups: tomato basil, cheddar dill, and loaded potato.The following table shows the sales price and variable cost for each type.Debbie incurs $200,000 a year in fixed costs.Assume that the restaurant has a sales mix of two tomato basil servings, two cheddar dill servings and one loaded potato serving. Required:
a.How many servings of each type will be sold at the breakeven point?
b.What amount of revenue would need to be generated by each type of soup for the company to earn $25,000 in operating income?

Question

Debbie's Kitchen sells three types of soups: tomato basil, cheddar dill, and loaded potato.The following table shows the sales price and variable cost for each type.Debbie incurs $200,000 a year in fixed costs.Assume that the restaurant has a sales mix of two tomato basil servings, two cheddar dill servings and one loaded potato serving.  Required: 
a.How many servings of each type will be sold at the breakeven point?
b.What amount of revenue would need to be generated by each type of soup for the company to earn $25,000 in operating income?

Quizplus · Accepted Answer

The Answer of Debbie's Kitchen sells three types of soups: tomato basil, cheddar dill, and loaded potato.The following table shows the sales price and variable cost for each type.Debbie incurs $200,000 a year in fixed costs.Assume that the restaurant has a sales mix of two tomato basil servings, two cheddar dill servings and one loaded potato serving.  Required: 
a.How many servings of each type will be sold at the breakeven point?
b.What amount of revenue would need to be generated by each type of soup for the company to earn $25,000 in operating income?

Debbie's Kitchen Sells Three Types of Soups: Tomato Basil, Cheddar