# Cove's Cakes is a local bakery. Price and cost information follows:Price per cakeVariable cost per cakeIngredientsDirect labor14.912.271.10Overhead (box, etc.)Fixed cost per month0.29\$5,175.00Required: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 \$455 per monthc. Variable costs decrease by \$0.44 per cake.d. Sales price decreases by \$0.60 per cake.2. Assume that Cove sold 480 cakes last month. Calculate the company's degree of operating leverage.3. Using the degree of operating leverage, calculate the change in profit caused by a 12 percent increase in sales revenue.

Question
73 views
check_circle

Step 1

Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question and specify the other subparts (up to 3) you’d like answered.

Step 2
1. Following are the calculation of new break-even point:
Step 3

b. When Fixed cost increase b...

### Want to see the full answer?

See Solution

#### Want to see this answer and more?

Solutions are written by subject experts who are available 24/7. Questions are typically answered within 1 hour.*

See Solution
*Response times may vary by subject and question.
Tagged in