I am submitting my Question: Bravo Baking identified the costs below to determin

Question

I am submitting my Question:

Bravo Baking identified the costs below to determine its cost of one unit of product and its monthly operating costs.The units produced is 14,000.

Table A                                                  Variable     Fixed

Materials used in baking bread                2.29          

Factory Supervisor Salaries                     0.12

Bakers Wages                                         2.29

Rent for Execitive offices                                        3000

Sales Commissions                                                  3500

Utilities used in the factory                   0.50

Advertising costs                                                      1000

Delivery truck depreciation                                         400

Depreciation on bake ovens                     0.07

Interest on bank loan                                                   500

Total costs    $5.26            $8400.00

Price Charged per unit    $7.89

I need the solutions to the below questions by using the information in Table A

Using the costs from Table A compute the below questions.

A) Breakeven units (rounded to 2 decimal places)

B) Break-even sales dollars

C) Contribution Margin

D) Contribution Margin Ratio (%)

Part II Complete the following requirements

A) If Bravo requires a profit of $5,000 how many units must it sell?

B) What is the total revenue from A above?

C) If Bravo actually sells 8,000 units

    1) What is the margin of safety in Dollars

    2) What is the margin of safety percentage?

Please show your work, so I can understand it.

Explanation / Answer

A) Breakeven in Units = Fixed Costs/Contribution Margin Contrib Margin = Price Charged per unit - Variable Cost per unit 7.89 - 5.26 = 2.63 (answer to letter C) $8,400/2.63 = 3,193.92 units B)Breakeven in Dollars = Fixed Costs/Contrib Margin Ratio Contrib Margin ratio = CM/price charged per unit 2.63/7.89 = 33.33 percent (answer to letter D) $8,400/.3333 = $25,202.52 PART II: A) Breakeven in units for profit of $5,000= Fixed Costs + Profit/CM $8,400 + 5,000/2.63 = 5,095.06 units B)Total Revenue per above table A Units produced X Price Charged per unit = 14,000 x 7.89 = $110,460 C) 8,000 units sold 1) Margin of Safety in Dollars = Total Sales - Breakeven Sales Total Sales = 8,000 x 7.89= $63,120.00 Breakeven Sales = 5,095.06 X 7.89 = $40,200.02 Answer:$22,919.98 2) Margin of Safety Percentage = Margin of Safety in $$$/Total Sales $$$ $22,919.98/$63,120.00 = 36.31 percent

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