Price per cake Variable cost per cake Ingredients Direct labor Overhead (box, etc.) Fixed cost per month 14.91 2.27 1.10 0.29 $5,175.00 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 $455 per month. c. 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 tA
Price per cake Variable cost per cake Ingredients Direct labor Overhead (box, etc.) Fixed cost per month 14.91 2.27 1.10 0.29 $5,175.00 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 $455 per month. c. 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 tA
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter3: Cost Behavior And Cost Forecasting
Section: Chapter Questions
Problem 54E: Income Statements under Absorption and Variable Costing In the coming year, Kalling Company expects...
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