Coves Cakes is a local bakery. Price and cost information follows: Price per cake ....... $17.00 Variable

Question:

Cove’s Cakes is a local bakery. Price and cost information follows:

Price per cake ....... $17.00

Variable cost per cake

Ingredients ........ 2.50

Direct labor ....... 1.40

Overhead (box, etc.) ..... 0.20

Fixed cost per month ....$3,850.00

Required:

1. Determine Cove’s break-even point in units and sales dollars.

2. Determine the bakery’s margin of safety if it currently sells 450 cakes per month.

3. Determine the number of cakes that Cove must sell to generate $2,000 in profit.

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Managerial Accounting

ISBN: 978-0078025518

2nd edition

Authors: Stacey Whitecotton, Robert Libby, Fred Phillips

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Question Posted: Feb 27, 2015 10:04 AM

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Coves Cakes is a local bakery. Price and cost information follows: Price per cake ....... $17.00 Variable

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Req 1 Contribution margin Sales Price Variable Costs 17 410 1290 Breakeven Units ...View the full answer

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