Exam II eztomheducation.com/hm.tpx Hawkes learning Blackboard Learn wkome-myutig

Question

Exam II eztomheducation.com/hm.tpx Hawkes learning Blackboard Learn wkome-myutigv (1) Rainbow Six. Six D Exam Cove's Cakes s a local bakery Price and cost information tollows S 1401 Variable cost per cake Ingredienis Dinect labor Overhead (box, ec) 35 1.04 Foxed cost per month $3,448 50 Required 1. Determine Cove's break-even point in units and sales dolars (Round your Break-Even Units answer to the nearest whole number. Round your other calculations and sales dollars answer to 2 deci Break -Even Unts Break-Even Sales Dolars the bakery's margin of salety i currenty sols 420 cakes per month (Round your intermediabe caliculations and dollar ) 3 Determine the umber of cakes that Cove must sell to generate $1,500 m proft (Round your intermediate calculations to 2 decimal places and final answer to nearest whole number) Type here to search

Explanation / Answer

Solution: 1. Break Even Units 330 Cakes Break Even Sales Dollars 4623.30 Working Notes: Break Even Units = Fixed cost / Contribution margin per unit Contribution margin per unit = Selling price per unit - Variable cost per unit Variable cost per unit = Ingredients + Direct labor + overhead =2.35+1.04+0.17 =$3.56 Contribution margin per unit = Selling price per unit - Variable cost per unit =$14.01 - $3.56 =10.45 per cake Break Even Units = Fixed cost / Contribution margin per unit =3448.50/10.45 =330 cakes Break Even Sales Dollars =Break Even Units x selling price per unit = 330 x 14.01 =$4,623.30 2. Margin of safety 1261 Working Notes: Margin of safety = Current sales – break-even sales break-even sales = $4,623.30 as calculated above. Current sales = 420 cakes x price per cake =420 x 14.01 =5,884.20 Margin of safety = Current sales – break-even sales =5,884.20 - 4,623.30 =$1,260.9 =$1,261 3. Target sales units 474 cakes Working Notes: contribution margin per unit =10.45 as calculated in 1. Target sales units = (fixed costs + Desired net income )/ Contribution margin =(3448.50 + 1500)/10.45 =4948.50/10.45 =473.540669856 =474 cakes

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