a) Based on answers above, what does Chlo have to charge per cupcake to break even in

 

a) Based on answers above, what does Chloé have to charge per cupcake to break even in an average month?

b) it should be  2-column CVP Income Statement for May 2022 if Chloé Cupcake sells 3500 units for $4 each (1 column for $, the other for %)

a. What is Chloé's Cupcakes profit margin in an average month?

b. Does this seem healthy to you? Explain why or why not. There is noright/wrong answer, points will be granted based on how you back up your opinion.

c) What is the contribution margin per unit?

d) At a sale price of $4 per cupcake

a. what is Chloé's Cupcakes break-even sales units?

b. What is their margin of safety (units)?

c. What is their margin of safety (ratio)?

e) If Chloé wanted a target net income of $5000/month

a. How many units would she have to sell at $4?

b. How many units would she have to sell if she increases unit price to $4.50?

Transcribed Image Text:

a) Direct material cost Direct material Butter($1.20/100gms)* 1250 per batch *35 batches Cupcake lines $5 per batch- 35 batches =$5*35 Eggs $ 4/per doxen 2 doz per batch*35 batches ($4*2*35) Floor $ 8 per Kg.3 Kgs per batch *35 batches ($8*2*35)=8*2*35 Icing Sugar $ 3 per Kg, 2.5Kgs per batch *35 batches (3*2.5*35) Sugar $1.50/kg* 2 kg per batch *35 batches (1.5*2*35) Total direct material cost b) Direct Labor cost c) Manufacturing Overhead Manufacturing overhead Store manager salary(70000/12*2) Shop rent 60% of $1600 Utilities at $500*75% Total manufacturing overhead d) Total Product costs Product Costs Direct material cost Direct labor Cost Manufacturing overhead Total Product costs e) total period costs Period Costs Advertising cost Website Direct Labor Assistant baker ($20 per hour *75 minuts (1 1/4hr) per batch*35 batches (20*1.25*35) $ 875.00 Head baker salary per month (70000/(12*2) $ 2,916.67 $3,791.67 Total direct labor cost showroom (500*25%) shop rent $1600*40% for show room/sales centre) Total Period Costs f) Total Costs $ 525.00 $ 175.00 Total costs Product costs Period costs Total Costs $ 280.00 $ 840.00 $ 262.50 $ 105.00 $ 2,187.50 $ 2,916.67 $ 960.00 $ 375.00 $4,251.67 $ 2,187.50 $ 3,791.67 $ 4,251.67 $ 10,230.83 $125 100.00 $ $ 125.00 $ 640.00 $990 $ 10,230.83 $990 $ 11,220.83 a) Direct material cost Direct material Butter($1.20/100gms)* 1250 per batch *35 batches Cupcake lines $5 per batch- 35 batches =$5*35 Eggs $ 4/per doxen 2 doz per batch*35 batches ($4*2*35) Floor $ 8 per Kg.3 Kgs per batch *35 batches ($8*2*35)=8*2*35 Icing Sugar $ 3 per Kg, 2.5Kgs per batch *35 batches (3*2.5*35) Sugar $1.50/kg* 2 kg per batch *35 batches (1.5*2*35) Total direct material cost b) Direct Labor cost c) Manufacturing Overhead Manufacturing overhead Store manager salary(70000/12*2) Shop rent 60% of $1600 Utilities at $500*75% Total manufacturing overhead d) Total Product costs Product Costs Direct material cost Direct labor Cost Manufacturing overhead Total Product costs e) total period costs Period Costs Advertising cost Website Direct Labor Assistant baker ($20 per hour *75 minuts (1 1/4hr) per batch*35 batches (20*1.25*35) $ 875.00 Head baker salary per month (70000/(12*2) $ 2,916.67 $3,791.67 Total direct labor cost showroom (500*25%) shop rent $1600*40% for show room/sales centre) Total Period Costs f) Total Costs $ 525.00 $ 175.00 Total costs Product costs Period costs Total Costs $ 280.00 $ 840.00 $ 262.50 $ 105.00 $ 2,187.50 $ 2,916.67 $ 960.00 $ 375.00 $4,251.67 $ 2,187.50 $ 3,791.67 $ 4,251.67 $ 10,230.83 $125 100.00 $ $ 125.00 $ 640.00 $990 $ 10,230.83 $990 $ 11,220.83

Answer rating: 100% (QA)

SOLUTION a To break even in an average month Chlo would need to charge a price per cupcake that covers the total costs The total costs per month including both product costs and period costs are 11220... View the full answer