Background:

The Maroon Maple is a bakery p located in the North San Jose Neighborhood, operated by brother$-$and$-$sister team Can and Cherry Carvalho. The siblings emigrated to the region from Portugal in $1971$ and brought with them their family recipes for delicious past$$is de nata $($egg custard tart$)$ and tosta mista $($toasted ham sandwich$).$ Their caf$$ has been a community staple since it started in $1990$ with most of its business coming from repeat, local, elderly customers. The caf$$ operates in the morning only from $7$:$00$am $-12$:$00$pm when it serves coffee, its popular past$$is de nata, and toasties. The sales mix and financial data for its offerings are as follows:

$$

$$

Percent of

total sales

Sales price

per unit

Variable cost

per unit

Coffee

$25\%$

$$3\mathrm{.}00$

$$0\mathrm{.}60$

Tosta mista

$60\%$

$$11\mathrm{.}50$

$$3\mathrm{.}45$

Past$$is de nata

$15\%$

$$5\mathrm{.}00$

$$4\mathrm{.}00$

$$

Most customers are dine$-$in customers, but the caf$$ does offer orders to$-$go when requested in person or over the phone. Of those customers dining in$,$ they have an average dine$-$in time of $50$ minutes. Order placing and service takes no more than $15$ minutes, the rest of the time the patrons spend enjoying their meal and chatting with other regular customers or staff.

$$

The caf$$ has fixed costs of $$205,000.$ In $2023,$ the caf$$ generated net income of $$107,000.$ To increase profitability, the owners are considering the following options for $2024.$

Requirements: Calculations:

Please show your work for all the calculations $-$ this means showing the formula$($s$)$ used to answer the question and your step$-$by$-$step calculations in reaching your final answers. Your work can be neatly handwritten or typed in a word or spreadsheet program. Round

your final figures to two decimals when needed.

$1.$ Calculate the company$$s current level of unit sales and sales dollars based on the net income of $$107,000.$ How much of each product is the company selling at this net income? Prepare a Contribution Margin Income Statement for the company at this level.

$2.$ What is the company$$s total break$-$even point in units?$$ Using this information, determine the break$-$even point in sales dollars. What is the company$$s break$-$even point in units and sales dollars for each product given the current situation?

$3.$ What is the company$$s margin of safety in units, sales dollars, and as a percentage for the current situation?