Kylie's Cookies is considering the purchase of a larger oven that will cost $2,200 and will increase her fixed costs by $30. What would happen if she purchased the new oven to realize the variable cost savings of $0.10 per cookie, and what would happen if she raised her price by just $0.20? She feels confident that such a small price increase will decrease the sales by only 20 units and may help her offset the increase in fixed costs. Given the following current prices how would the break-even in units and dollars change if she doesn't increase the selling price and if she does increase the selling price? Complete the monthly contribution margin income statement for each of these cases. Round your answers to two decimal places. Round break-even units to a whole number. Selling Price, Variable Cost and Fixed Cost Change Analysis With Current Price With Decreased VC and Increased FC With Increased SP, Decreased VC, and Increased FC Sales Price per Unit $1.70 $fill in the blank 1 $fill in the blank 2 Variable Cost per Unit 0.40 fill in the blank 3 fill in the blank 4 Contribution Margin per Unit $1.30 $fill in the blank 5 $fill in the blank 6 Fixed Costs $390 $fill in the blank 7 $fill in the blank 8 Break-even in Units 300 fill in the blank 9 fill in the blank 10 Break-even in Dollars $510 $fill in the blank 11 $fill in the blank 12 Monthly Contribution Margin Income Statement With Current Price With Decreased VC and Increased FC With Increased SP, Decreased VC, and Increased FC Unit Sales, Expected 800 fill in the blank 13 fill in the blank 14 Sales $fill in the blank 15 $fill in the blank 16 $fill in the blank 17 Variable Costs fill in the blank 18 fill in the blank 19 fill in the blank 20 Contribution Margin $fill in the blank 21 $fill in the blank 22 $fill in the blank 23 Fixed Costs fill in the blank 24 fill in the blank 25 fill in the blank 26 Net Income $fill in the blank 27 $fill in the blank 28 $fill in the blank 29

Kylie's Cookies is considering the purchase of a larger oven that will cost $2,200 and will increase her fixed costs by $30. What would happen if she purchased the new oven to realize the variable cost savings of $0.10 per cookie, and what would happen if she raised her price by just $0.20? She feels confident that such a small price increase will decrease the sales by only 20 units and may help her offset the increase in fixed costs. Given the following current prices how would the break-even in units and dollars change if she doesn't increase the selling price and if she does increase the selling price? Complete the monthly contribution margin income statement for each of these cases. Round your answers to two decimal places. Round break-even units to a whole number. Selling Price, Variable Cost and Fixed Cost Change Analysis With Current Price With Decreased VC and Increased FC With Increased SP, Decreased VC, and Increased FC Sales Price per Unit $1.70 $fill in the blank 1 $fill in the blank 2 Variable Cost per Unit 0.40 fill in the blank 3 fill in the blank 4 Contribution Margin per Unit $1.30 $fill in the blank 5 $fill in the blank 6 Fixed Costs $390 $fill in the blank 7 $fill in the blank 8 Break-even in Units 300 fill in the blank 9 fill in the blank 10 Break-even in Dollars $510 $fill in the blank 11 $fill in the blank 12 Monthly Contribution Margin Income Statement With Current Price With Decreased VC and Increased FC With Increased SP, Decreased VC, and Increased FC Unit Sales, Expected 800 fill in the blank 13 fill in the blank 14 Sales $fill in the blank 15 $fill in the blank 16 $fill in the blank 17 Variable Costs fill in the blank 18 fill in the blank 19 fill in the blank 20 Contribution Margin $fill in the blank 21 $fill in the blank 22 $fill in the blank 23 Fixed Costs fill in the blank 24 fill in the blank 25 fill in the blank 26 Net Income $fill in the blank 27 $fill in the blank 28 $fill in the blank 29

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter3: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 5PA: Kylies Cookies is considering the purchase of a larger oven that will cost $2,200 and will increase...

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Question

Round your answers to two decimal places. Round break-even units to a whole number.

Selling Price, Variable Cost and Fixed Cost Change Analysis
	With Current Price	With Decreased VC and Increased FC	With Increased SP, Decreased VC, and Increased FC
Sales Price per Unit	$1.70	$fill in the blank 1	$fill in the blank 2
Variable Cost per Unit	0.40	fill in the blank 3	fill in the blank 4
Contribution Margin per Unit	$1.30	$fill in the blank 5	$fill in the blank 6
Fixed Costs	$390	$fill in the blank 7	$fill in the blank 8
Break-even in Units	300	fill in the blank 9	fill in the blank 10
Break-even in Dollars	$510	$fill in the blank 11	$fill in the blank 12

Monthly Contribution Margin Income Statement
	With Current Price	With Decreased VC and Increased FC	With Increased SP, Decreased VC, and Increased FC
Unit Sales, Expected	800	fill in the blank 13	fill in the blank 14
Sales	$fill in the blank 15	$fill in the blank 16	$fill in the blank 17
Variable Costs	fill in the blank 18	fill in the blank 19	fill in the blank 20
Contribution Margin	$fill in the blank 21	$fill in the blank 22	$fill in the blank 23
Fixed Costs	fill in the blank 24	fill in the blank 25	fill in the blank 26
Net Income	$fill in the blank 27	$fill in the blank 28	$fill in the blank 29

Expert Solution

PART 1

Selling Price, Variable Cost and Fixed Cost Change Analysis

	With Current Price	With Decreased VC and Increased FC	With Increased SP, Decreased VC, and Increased FC
Sales Price per Unit	$1.70	$1.70	$1.90
Variable Cost per Unit	0.40	0.30	0.30
Contribution Margin per Unit	$1.30	$1.4	$1.6
Fixed Costs	$390	$420	$420
Break-even in Units	300	300	263
Break-even in Dollars	$510	$510	$500

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