Question
In: Accounting
Cove’s Cakes is a local bakery. Price and cost information follows: Price per cake $ 14.61...
Cove’s Cakes is a local bakery. Price and cost information
follows:
| Price per cake | $ | 14.61 | |
| Variable cost per cake | |||
| Ingredients | 2.22 | ||
| Direct labor | 1.15 | ||
| Overhead (box, etc.) | 0.27 | ||
| Fixed cost per month | $ | 3,291.00 | |
Required:
1. Determine Cove’s break-even point in units and sales dollars.
2. Determine the bakery’s margin of safety if it currently sells 370 cakes per month.
3. Determine the number of cakes that Cove must sell to generate $1,900 in profit.
Solutions
Expert Solution
Requirement 1
Break even point in units = 300 units
Break even point in sales dollars = $ 4,383
Requirement 2:
Margin of safety = $ 1022.70
Requirement 3:
Number of cakes sold to get desired profit = 473 cakes (rounded off)
Working:
| Amount | ||
| Selling Price per unit | $ 14.61 | |
| Less :Variable Cost | $ (3.64) | (2.22+1.15+0.27) |
| Contribution Margin | $ 10.97 | |
| Fixed Cost | $ 3,291.00 | |
| Break Even Sales in $ [Fixed Costs/ Contribution Margin]*Selling price per unit | $ 4,383.00 | 3291/10.97*14.61 |
| Break Even Sales units [Fixed Costs/ Contribution Margin] | 300 | 3291/10.97 |
| Margin In Safety [in dollars] [Actual sales - break even sales] | $ 1,022.70 | (370*14.61)-4383 |
| Sales for Desired Profit[ In Units] [fixed cost+desired income] / contribution margin] | 473.20 | (3291+1900)/10.97 |
ekkarill92 answered 1 year agoRelated Solutions
Cove’s Cakes is a local bakery. Price and cost information follows: Price per cake $ 14.21...
Cove’s Cakes is a local bakery. Price and cost information
follows:
Price per cake
$
14.21
Variable cost per cake
Ingredients
2.18
Direct labor
1.16
Overhead (box, etc.)
0.28
Fixed cost per month
$
4,130.10
Required:
1. Calculate Cove’s new break-even point under
each of the following independent scenarios:
a. Sales price increases by $1.70 per cake.
b. Fixed costs increase by $460 per month.
c. Variable costs decrease by $0.44 per
cake.
d. Sales price decreases by $0.20 per...
Cove’s Cakes is a local bakery. Price and cost information follows: Price per cake $ 13.71...
Cove’s Cakes is a local bakery. Price and cost information
follows:
Price per cake
$
13.71
Variable cost per cake
Ingredients
2.16
Direct labor
1.15
Overhead (box, etc.)
0.15
Fixed cost per month
$
4,715.00
Required:
1. Calculate Cove’s new break-even point under
each of the following independent scenarios:
a. Sales price increases by $1.80 per cake.
b. Fixed costs increase by $530 per month.
c. Variable costs decrease by $0.34 per
cake.
d. Sales price decreases by $0.60 per...
Cove’s Cakes is a local bakery. Price and cost information follows: Price per cake $ 14.81...
Cove’s Cakes is a local bakery. Price and cost information
follows:
Price per cake
$
14.81
Variable cost per cake
Ingredients
2.34
Direct labor
1.03
Overhead (box, etc.)
0.21
Fixed cost per month
$
4,042.80
Required:
1. Calculate Cove’s new break-even point under each of the
following independent scenarios: (Round your answer to the
nearest whole number.)
a. Sales price increases by $1.90 per cake.
b. Fixed costs increase by $525 per month.
c. Variable costs decrease by $0.35 per...
Cove’s Cakes is a local bakery. Price and cost information follows: Price per cake $ 14.11...
Cove’s Cakes is a local bakery. Price and cost information
follows:
Price per cake
$
14.11
Variable cost per cake
Ingredients
2.35
Direct labor
1.05
Overhead (box, etc.)
0.18
Fixed cost per month
$
4,212.00
Required:
1. Calculate Cove’s new break-even point under each of the
following independent scenarios: (Round your answer to the
nearest whole number.)
a. Sales price increases by $1.50 per cake.
b. Fixed costs increase by $460 per month.
c. Variable costs decrease by $0.43 per...
Cove’s Cakes is a local bakery. Price and cost information follows: Price per cake $ 14.01...
Cove’s Cakes is a local bakery. Price and cost information
follows:
Price per cake
$
14.01
Variable cost per cake
Ingredients
2.33
Direct labor
1.19
Overhead (box, etc.)
0.11
Fixed cost per month
$
3,010.20
Required:
1. Calculate Cove’s new break-even point under each of the
following independent scenarios: (Round your answer to the
nearest whole number.)
a. Sales price increases by $1.50 per cake.
Break Even Point _______ Cakes
b. Fixed costs increase by $485 per month.
Break Even...
Cove’s Cakes is a local bakery. Price and cost information follows: Price per cake $ 14.71...
Cove’s Cakes is a local bakery. Price and cost information
follows: Price per cake $ 14.71 Variable cost per cake Ingredients
2.22 Direct labor 1.10 Overhead (box, etc.) 0.21 Fixed cost per
month $ 4,024.80
Required: 1. Calculate Cove’s new break-even point under each of
the following independent scenarios: (Round your answer to the
nearest whole number.)
a. Sales price increases by $1.80 per cake.
Break-Even Point
cakes
b. Fixed costs increase by $480 per
month.
Break-Even Point
cakes
c....
Cove’s Cakes is a local bakery. Price and cost information follows: Price per cake $ 14.71...
Cove’s Cakes is a local bakery. Price and cost information
follows:
Price per cake
$
14.71
Variable cost per cake
Ingredients
2.31
Direct labor
1.01
Overhead (box, etc.)
0.13
Fixed cost per month
$
4,278.80
Required:
1. Calculate Cove’s new break-even point under
each of the following independent scenarios:
a. Sales price increases by $1.60 per cake.
b. Fixed costs increase by $545 per month.
c. Variable costs decrease by $0.42 per
cake.
d. Sales price decreases by $0.60 per...
Cove’s Cakes is a local bakery. Price and cost information follows: Price per cake $ 14.01...
Cove’s Cakes is a local bakery. Price and cost information
follows:
Price per cake
$
14.01
Variable cost per cake
Ingredients
2.19
Direct labor
1.12
Overhead (box, etc.)
0.29
Fixed cost per month
$
3,955.80
Required:
1. Calculate Cove’s new break-even point under each of the
following independent scenarios: (Round your answer to the
nearest whole number.)
a. Sales price increases by $1.10 per cake.
b. Fixed costs increase by $450 per
month.
c. Variable costs decrease by $0.44 per...
Cove’s Cakes is a local bakery. Price and cost information follows: Price per cake $ 14.61...
Cove’s Cakes is a local bakery. Price and cost information
follows:
Price per cake
$
14.61
Variable cost per cake
Ingredients
2.15
Direct labor
1.01
Overhead (box, etc.)
0.16
Fixed cost per month
$
3,274.10
Required:
1. Calculate Cove’s new break-even point under
each of the following independent scenarios:
a. Sales price increases by $1.60 per cake.
b. Fixed costs increase by $465 per month.
c. Variable costs decrease by $0.30 per
cake.
d. Sales price decreases by $0.70 per...
Cory’s Cakes is a local bakery. Price and cost information follows: Price per cake $ 17.00...
Cory’s Cakes is a local bakery. Price and cost information
follows:
Price per cake
$
17.00
Variable cost per cake
Ingredients
2.50
Direct labor
1.40
Overhead (box, etc.)
0.20
Fixed cost per month
$
3,850.00
Required:
Determine Cory’s break-even point in units and sales
dollars.
Determine the bakery’s margin of safety if it currently sells
450 cakes per month.
Determine the number of cakes that Cory must sell to generate
$2,000 in profit.
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- What are the two reasons that limit the ability of correlational studies to provide information on...
- Suppose that 20 monthly payments of $100 each are followed by 30 monthly payments of $200...
- D. Explain what it means for recommendations to be specific and actionable. E. Discuss how charts...
- Capital Toys’ management is considering eliminating product A, which has been showing a loss for several...
- Computer Networks IT 210 Please Use your own words . sorry No handwriting no copy paste...
- The Coronavirus will obviously impact the economy of big organizations like FIFA or the NBA but...
- Question: what is the difference between rights of assertion and observation assertion. Include which financial statements...
ADVERTISEMENT