Dees Truck Stop is a restaurant on the south coast that offers breakfast, lunch, and dinner. The fixed cost is $204,000. The company’s planned weekly sales are 1800, 1200 and 600, respectively. 

Additional data about the two products are as follows: 

                                                                    Breakfast       Lunch        Dinner 

Selling price                                                $350              $450           $600 

Variable cost per unit (VCU)                       210                270            360 

Contribution margin per unit (CMU)        140                180           240 

Required: 

a) Calculate the breakeven revenue in dollars ($) for Breakfast.

b) Calculate the number of lunches to sell to achieve a target income of $76,500 before tax.

c) Calculate the Margin of Safety in units for each product. 

Answer rating: 100% (QA)

Margin of safety actual sales break e... View the full answer