Question

Asher Hyatt owns and operates BabyCakes, a bakery that creates personalized birthday cakes for a child's first birthday. The cakes, which sell for
$56 and feature an edible picture of the child, are shipped throughout the country. A typical month's results are as follows:
Sales revenue ........... $840,000
Variable expenses........ 630,000
Contribution margin..... 210,000
Fixed expenses......... 112,000
Operating income........ $ 98,000

Required
a. What is BabyCakes' contribution margin per unit?
b. What is BabyCakes' monthly breakeven point in units?
c. What is BabyCakes' contribution margin ratio?
d. What is BabyCakes' monthly breakeven point in sales dollars?



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  • CreatedFebruary 21, 2014
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