Question

So frustrated right now. Can someone explain this problem to me? How do they come up with 40%?

Jackie's Creamery sells fudge, caramels, and popcorn to consumers in the local community. The manager at the creamery sold

14,000 units last year. Popcorn outsold fudge by a ratio of 2 to 1. Sales of caramels equaled sales of popcorn. Total fixed costs for Jackie's Creamery are

$13,000.

The managerial accountant reported the following information:

	Fudge	Caramel	Popcorn
Sales	$6.00	$8.00	$9.00
Variable Cost	$2.00	$2.00	$7.00

The sales mix percentage of caramel corn based upon units is

A.. 75%

B.. 44%

C. 20%.

D. 40%.

The answer is 40%, can someone explain step by step why? I am certain this is going to be on the actual test and I need to know what I'm doing. Thanks.

Answer 1

Answer

Don’t get Frustrated, this is very simple.

It is mentioned that Popcorn outsold fudge by a ratio of 2 to 1. Sales of caramels equaled sales of popcorn.

So let’s take Fudge Sales = x

Therefore, Popcorn Sales = 2 time of Fudge sales

Popcorn Sales = 2x

And

Caramels Sale = Popcorn Sale

Caramels Sale = 2x

So ratio is

Fudge: Popcorn: Caramels

1: 2: 2

So if total sale is 100%, then

Fudge Share = 20% (1/5 * 100%)

Popcorn Share = 40% (2/5 * 100%)

Caramels Share = 40% (2/5 * 100%)

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