$ 15:01 2.32 0.30 Price per cake Variable cost per cake Ingredients 1.16 Direct
ID: 2551857 • Letter: #
Question
$ 15:01 2.32 0.30 Price per cake Variable cost per cake Ingredients 1.16 Direct laborEEEEE Overhead (box, etc.) Fixed cost per monthce $4,941.20 Required: 1. Determine Cove's break-even point in units and sales dollars. (Round your Br sales dollars answer to 2 decimal places.) Break-Even Units440 Cakes Break- Even Sales Dollars 6.60440 2. Determine the bakery's margin of safety if it currently sells 530 cakes per month nearest whole dollar.) Margin of Safety 3. Determine the number of cakes that Cove must sell to generate $1,100 in profit Target Sales Units CakesExplanation / Answer
Total variable costs=(2.32+1.16+0.3)=$3.78
Contribution margin=Sales-Variable costs
=(15.01-3.78)=$11.23
1.Breakeven=Fixed cost/Contribution margin
=(4941.2/11.23)=440 cakes
=(440*15.01)=$6604.40
2.MOS=Total sales-Breakeven sales
=(530-440)=90 cakes
=(90*15.01)=$1351(Approx)
3.TARGET Contribution margin=Fixed cost+Target profits
(4941.2+1100)=$6041.2
hence units to be sold=(6041.2/11.23)=537.95 cakes(or 538 cakes approx).
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