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Maria Banggan sells two types of products: organic red pepper paste and organic manga rice cake.

2. Maria Banggan sells two types of products: organic red pepper paste and organic manga rice cake. In this regard, the information relating to gains and losses for each product last month is as follows:

Variable cost calculation profit and loss statement

 (Maria mill)


Sales     ₩200000

Variable sales cost.    ₩70000

Fluctuating sales management    ₩50000

contribution profit.    ₩80000

fixed cost.    ₩70000

Operating profit.  ₩10000

(1) The sales mix of red pepper paste and manganese rice cake is 25% and 75% respectively. Also, the contribution margin of red pepper paste and mangae tteok is 40 percent and 80 percent, respectively. If the total fixed cost of the mill is as follows, seek the operating profit of each of the gochujang and mangae tteok.

~Fixed manufacturing overhead: Gochujang - ₩30,000 Manganese Rice Cake - ₩20,000

 ~ Fixed sales management fee: Sales clerk salary ₩20,000


(2) Obtain the break-even sales amount of organic red pepper paste. (Two Points)


(3) Maria Banggan's owner plans to stop producing and selling organic red pepper paste products in order to increase the operating profit ratio of the mill (the percentage of sales operating profit). However, organic red pepper paste is a signature product with a 50-year history of Maria Banggan, and if the product is stopped, the brand power of the mill will be weakened (consumers' awareness) and the sales of mangae tteok will be reduced by 10 percent. Explain by analyzing the increase or decrease in operating profit and operating profit ratio of the mill owner whether it is right to stop producing and selling organic red pepper paste to increase the operating profit ratio of the mill. Maria Banggan analyzes the gain or loss using only variable cost calculation. (Four Points)

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