Death by Chocolate sells specialty fudge in three flavors: Marshmallow,Plain,and Peanut.They sold 10,000 pounds last year.For every five pounds of fudge sold,one pound is Marshmallow and the remainder is split evenly between Plain and Peanut.Fixed costs for Death by Chocolate are $24,000 and additional information follows: $\begin{array}{|l|c|r|r|}
\hline& \text { Marshmallow } & \text { Plain } & \text { Peanut } \
\hline \text { Sales price per pound } & \$ 10.00 & \$ 8.00 & \$ 12.00 \
\hline \text { Variable cost per pound } & \$ 6.00 & \$ 5.00 & \$ 9.00 \
\hline
\end{array}$

- Break-even sales in dollars for Death by Chocolate is:

Question

Death by Chocolate sells specialty fudge in three flavors: Marshmallow,Plain,and Peanut.They sold 10,000 pounds last year.For every five pounds of fudge sold,one pound is Marshmallow and the remainder is split evenly between Plain and Peanut.Fixed costs for Death by Chocolate are $24,000 and additional information follows: $\begin{array}{|l|c|r|r|}
\hline& \text { Marshmallow } & \text { Plain } & \text { Peanut } \
\hline \text { Sales price per pound } & \$  10.00 & \$ 8.00 & \$ 12.00 \
\hline \text { Variable cost per pound } & \$  6.00 & \$ 5.00 & \$  9.00 \
\hline
\end{array}$

- Break-even sales in dollars for Death by Chocolate is:

Quizplus · Accepted Answer

To find the break-even sales in dollars, calculate the weighted average contribution margin per pound and then use it to find the break-even point. Marshmallow is 1/5 of sales, and Plain and Peanut are each 2/5. Contribution margins: Marshmallow = $4, Plain = $3, Peanut = $3. Weighted average contribution margin = (1/5 * $4) + (2/5 * $3) + (2/5 * $3) = $3.40. Break-even point in pounds = $24,000 / $3.40 = 7,058.82 pounds. Total sales revenue at break-even = 7,058.82 pounds * $10 (average price) = $75,000.

Death by Chocolate Sells Specialty Fudge in Three Flavors: Marshmallow,Plain,and