Cove’s Cakes is a local bakery. Price and cost information follows: Price per cake $ 13.61 Variable cost per cake Ingredients 2.22 Direct labor 1.16 Overhead (box, etc.) 0.23 Fixed cost per month $ 3,500.00 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 430 cakes per month. 3. Determine the number of cakes that Cove must sell to generate $1,300 in profit.
Cove’s Cakes is a local bakery. Price and cost information follows: Price per cake $ 13.61 Variable cost per cake Ingredients 2.22 Direct labor 1.16 Overhead (box, etc.) 0.23 Fixed cost per month $ 3,500.00 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 430 cakes per month. 3. Determine the number of cakes that Cove must sell to generate $1,300 in profit.
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter16: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 24E: Busy-Bee Baking Company produces a variety of breads. The average price of a loaf of bread is 1....
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Cove’s Cakes is a local bakery. Price and cost information follows:
Price per cake | $ | 13.61 | |
Variable cost per cake | |||
Ingredients | 2.22 | ||
Direct labor | 1.16 | ||
Overhead (box, etc.) | 0.23 | ||
Fixed cost per month | $ | 3,500.00 | |
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 430 cakes per month.
3. Determine the number of cakes that Cove must sell to generate $1,300 in profit.
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