Kit Kitchen sells three types of soups: tomato basil, cheddardill and loaded potato. The following table shows the sales priceand variable cost for each type. The restaurant incurs $200,000 ayear in fixed costs. Assume that the restaurant has a sales mix oftwo tomato basil servings, two cheddar dill servings and one loadedpotato serving.
Type | Sales Price/u | Variable Cost/u | Contribution Margin/u |
Tomato basil | $3.00 | $1.50 | $1.50 |
Cheddar dill | $4.50 | $2.00 | $2.50 |
Loaded potato | $4.50 | $2.50 | $2.00 |
How many servings (units) of each type will be sold at thebreakeven point?
What amount of revenue ($) would need to be generated by eachtype of soup for the company to earn $25,000 in operatingincome?
