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

question 86

Essay

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?

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Definitions:

Directly Proportional

A relationship between two variables where their ratio is constant.

Stopping Distance

The total distance a vehicle travels from the point when the driver first perceives a need to stop, to when the vehicle comes to a complete halt.

Inversely Proportional

A relationship between two variables where their product is constant. When one variable increases, the other decreases proportionally.

Daily Demand

The total quantity of a good or service that consumers want to purchase over the course of a single day.