# Clarissa sells her cupcakes for $2.50 each. Clarissa's variable costs per cupcake equal $0.50 and her monthly

## Question:

Clarissa sells her cupcakes for $2.50 each. Clarissa's variable costs per cupcake equal $0.50 and her monthly fixed costs are $3,000.

Required:

a. What is Clarissa's contribution margin per cupcake?

b. How many cupcakes does Clarissa need to sell each month to break even?

c. How many cupcakes does Clarissa need to sell each month to earn a monthly profit of $2,000?

Contribution MarginContribution margin is an important element of cost volume profit analysis that managers carry out to assess the maximum number of units that are required to be at the breakeven point. Contribution margin is the profit before fixed cost and taxes...

Fantastic news! We've Found the answer you've been seeking!

## Step by Step Answer:

**Related Book For**

## Managerial Accounting

**ISBN:** 978-1118385388

2nd edition

**Authors:** Ramji Balakrishnan, Konduru Sivaramakrishnan, Geoff B. Sprinkle