Cove's Cakes is a local bakery. Price and cost information follows: Price per cake Variable cost...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
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 %
Expert Answer:
Answer rating: 100% (QA)
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
Posted Date:
Students also viewed these accounting questions
-
Intermediate Sanctions. For each of the following independent situations, determine whether the organization is at risk for receiving intermediate sanctions from the Internal Revenue Service for...
-
Calculate the missing information for each of the following independent cases: Deginning Cost of Goods Ending Inventory Ending Inventory Cases Inry Purchases Sold (perpetual system) ( (as counted...
-
Each of the following independent examples involves one or more of the four major activities carried out by managers at Sights and Sounds, a manufacturer of high-quality televisions and audio...
-
Solutions to which of the following categories of modeling techniques indicate a course of action to the decision maker? Group of answer choices Preventive models Predictive models Descriptive models...
-
The German towns around the Black Forest are rep-resented by nodes in the network below. The dis-tances between towns is shown in kilometers. Find the shortest route from city 1 to city 16. If...
-
There are three securities in the market. The following chart shows their possible payoffs. a. What is the expected return and standard deviation of each security? b. What are the covariances and...
-
What is the credit rating on a bond and what factors determine it?
-
In a manufacturing process, a transparent film is being bonded to a substrate as shown in the sketch. To cure the bond at a temperature To, a radiant source is used to provide a heat flux qo (W/m 2...
-
3 The income statement, balance sheets, and additional information for Virtual Gaming Systems are provided. VIRTUAL GAMING SYSTEMS Income Statement For the Year Ended December 31, 2024 $2,410,000...
-
Ben Conway, Ida Chan, and Clair Scott formed CCS Consulting this year by making capital contributions of $278,000, $314,000, and $208,000, respectively. They anticipate annual profit of $480,000 and...
-
Identify whether each of the following would be reported as an operating , investing , or financing activity on the Statement of Cash Flows: Selling investments Cash sales Paying income taxes in cash...
-
What primary language did you speak before coming to the United States? Describe your competency as a speaker of your home language.
-
if the demand increases more rapidly for software engineers than for office clerks, what would you expect to happen to the average pay for the two occupations?
-
How did XYZ Company sustain the effectiveness of their inventory management and control system over time?
-
A balloon having a volume of 10,000 cu ft is filled with hot air at atmospheric pressure and a temperature of 280 F. If the temperature of the surround- ing air is 77 F and the weight of the balloon...
-
Total assets $1,030,000 Total liabilities 618,000 Total stockholders' equity ? Interest expense $ 20,000 Income tax expense 110,000 Net income 157,000 (a) Compute the December 31, 2022, balance in...
-
7) expected return of 7%. What are the portfolio weights? Your portfolio consists of 50% stock A, 40% stock B, and 10% stock C with the following assumptions. What is the expected return and the...
-
Provide a few individual examples who revealed what aspects of emotional intelligence?
-
Given the following data, compute the 2013 return on equity ratio (expressed as a percentage with one decimalplace). 2013 2012 Net income Stockholders' equity Total assets Interest expense $1,850...
-
What are the typical cash inflows from operating activities? What are the typical cash outflows from operating activities? Discuss.
-
What is the accounting rate of return for a project that is estimated to yield total income of $390,000 over three years and costs $920,000?
-
A situation where quantity demanded is greater than quantity supplied is called a(n) _________.
-
At a price greater than the equilibrium price, a(n) _________, or excess quantity supplied, would exist. Sellers would be willing to sell _________ than demanders would be willing to buy. Frustrated...
-
If the price of zucchini increases, causing the demand for yellow squash to rise, what do we call the relationship between zucchini and yellow squash?
Study smarter with the SolutionInn App