coves cakes is a local bakery. Price and cost information as follows... jackson

Question

coves cakes is a local bakery. Price and cost information as follows...

jackson e) Inc.Podurix Cllckson , , Inc.Prodi.x Ei, schon, Inc. Pro eztornheducation.com/h! O Mast Vistedmyautigv eduEEBRLogin arch everything on Top Hat Highe EdA.. on Cove's Cakes A Loca 10. Cove's Cakes is a local bakery Price and cost information folows Price per cake Variable cost per cake S 13.01 ngredents Directlabor Overhead (box, etc) 2 18 1 14 0.11 53,544.60 Fixed cost per month Required 1. Determine Cove's break even point in units and sales dollars iRound your Proak Even Units answer to the naarest whe Round your other intermediate calculations and sales dollars aawer to 2 decimai place te numbe Break Even Units Break Even Sales Cakes

Explanation / Answer

Req 1 Selling price per unit 13.01 Less: variable cost per unit (2.18+1.14+0.11) 3.43 Contribution margin per unit 9.58 Fixed cost: $ 3544.60 CM ratio : Contribution per unit / Selling price = 9.58 /13.01 *100 = 73.64% Break even in units: fixed cosst/ contribution per unit =3544.60/9.58 = 370 cakes Break even in $: Fixed cost / CM ratio = $3544.60 /73.64% = $4813.70 Req 2: Total sales: 460 cakes Break evenen sales : 370 cakes margin of safety: Total sales- Break even sales = 460 -370 = 90 cakes Req 3: Desired profit: $2,200 Desired contribution: 2200 +3544.60 = 5744.60 Target sales in units: Desired contribution / Contribution per unt = 5744.60 /9.58 =600 cakes

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