Cove's Cakes is a local bakery. Price and cost information follows: Price per cake Variable cost...
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Cove's Cakes is a local bakery. Price and cost information follows: Price per cake Variable cost per cake Ingredients Direct labor Overhead (box, etc.) Fixed cost per month 14.81 2.17 1.19 0.24 $4,035.60 Required: 1. Calculate Cove's new break-even point under each of the following independent scenarios: (Round your answer to the nearest whole number.) a. Sales price increases by $1.60 per cake. Break-Even Point cakes b. Fixed costs increase by $515 per month. Break-Even Point cakes c. Variable costs decrease by $0.33 per cake. Break-Even Point cakes d. Sales price decreases by $0.40 per cake. Break-Even cakes Point 2. Assume that Cove sold 370 cakes last month. Calculate the company's degree of operating leverage. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Degree of Operating Leverage 3. Using the degree of operating leverage calculated in Requirement 2, calculate the change in profit caused by a 12 percent increase in sales revenue. (Round your final answer to 2 decimal places (i.e. .1234 should be entered as 12.34%.)) Effect on Profit % Cove's Cakes is a local bakery. Price and cost information follows: Price per cake Variable cost per cake Ingredients Direct labor Overhead (box, etc.) Fixed cost per month 14.81 2.17 1.19 0.24 $4,035.60 Required: 1. Calculate Cove's new break-even point under each of the following independent scenarios: (Round your answer to the nearest whole number.) a. Sales price increases by $1.60 per cake. Break-Even Point cakes b. Fixed costs increase by $515 per month. Break-Even Point cakes c. Variable costs decrease by $0.33 per cake. Break-Even Point cakes d. Sales price decreases by $0.40 per cake. Break-Even cakes Point 2. Assume that Cove sold 370 cakes last month. Calculate the company's degree of operating leverage. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Degree of Operating Leverage 3. Using the degree of operating leverage calculated in Requirement 2, calculate the change in profit caused by a 12 percent increase in sales revenue. (Round your final answer to 2 decimal places (i.e. .1234 should be entered as 12.34%.)) Effect on Profit %
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Solution Part1a BEPCakes Fixed cost CM per Unit 403561281315 Cakes C... View the full answer
Related Book For
Managerial Accounting
ISBN: 978-0078025518
2nd edition
Authors: Stacey Whitecotton, Robert Libby, Fred Phillips
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