Question

is a specialty popcorn store. It offers two varieties of​ popcorn: plain and flavored. The flavors range from Caramel Popcorn to Dark Chocolate Drizzled Popcorn to White Cheddar Popcorn. The plain popcorn sells for per box and costs per box to make. The flavored popcorn sells for per box and costs per box to make. has fixed costs per month of . sells 1 box of plain popcorn for every 4 boxes of flavored popcorn. How many boxes of plain popcorn and how many boxes of flavored popcorn must sell each month to break​ even?

Answer 1

Answer:

The numbers are missing, so I looked for a similar question (see image):

first we must calculate the contribution margin:

plain popcorn = selling price - variable costs = $2 - $0.80 = $1.20

flavored popcorn = selling price - variable costs = $4 - $2.50 = $1.50

sales mix = 1 plain : 4 flavored

weighted contribution margin = [$1.20 + (4 x $1.50)] / 5 = $1.44

total fixed costs = $3,240

break even point in units = $3,240 / $1.44 = 2,250 units

the company must sell 2,250 x 1/5 = 450 plain popcorn boxes and 1,850 flavored popcorn boxes in order to break even