Safari File Edit View History Bookmarks Window Help 59%)L, Tue Jun 19 6:32 PM Al

Question

Safari File Edit View History Bookmarks Window Help 59%)L, Tue Jun 19 6:32 PM Alex E , ezto.mheducation.com Home - alamo.edu Chapter 6 Exercises Cove's Cakes is a local bakery. Price and cost information follows: Price per cake ariable cost per cake $14.01 2.21 1.03 0.23 $3,794.40 Ingredients Direct labor Overhead (box, etc.) Fixed cost per month 1. Determine Cove's break-even point in units and sales dollars. (Round your Break-Even Units answer to the nearest whole number. Round your other intermediate calculations and sales dollars answer to 2 decimal places.) Break-Even Units Cakes Break-Even Sales Dollars 2. Determine the bakery's margin of safety if it currently sells 440 cakes per month. (Round your intermediate calculations to 2 decimals. Round the break-even units and final answer to nearest whole dollar.) Margin of Safety 3. Determine the number of cakes that Cove must sell to generate $2,500 in profit. (Round your intermediate calculations to 2 decimal places and final answer to nearest whole number.) Sales Units Cakes popcorntime ap

Explanation / Answer

Variable cost per unit = 2.21+1.03+0.23 = 3.47 per cakes

Contribution margin per unit = 14.01-3.47 = 10.54 per cakes

a) Break even point = 3794.40/10.54 = 360 Cakes

Break evend sales dollars = 360*14.01 = $5043.60

2) Margin of safety = 440-360 = 80 Cakes

Margin of safety = 80*14.01 = $1120.80

3) Target sales units = (3794.40+2500)/10.54 = 597 Cakes

Related Questions

Navigate

• Browse (All)
• Browse S
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.