E$6-4($Algo$)$ Analyzing Changes in Price, Cost Structure, Degree of Operating Leverage $[$LO $6-4,6-5]$

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 costs per month

$$13\mathrm{.}91$

$2\mathrm{.}34$

$1\mathrm{.}09$

$0\mathrm{.}15$

$4,028\mathrm{.}70$

Required:

Calculate Cove's new break$-$even point under each of the following independent scenarios:

a$.$ Sales price increases by $$1\mathrm{.}70$ per cake.

b$.$ Fixed costs increase by $$520$ per month.

c$.$ Variable costs decrease by $$0\mathrm{.}38$ per cake.

d$.$ Sales price decreases by $$0\mathrm{.}80$ per cake.

Assume that Cove sold $410$ cakes last month. Calculate the company's degree of operating leverage.

Using the degree of operating leverage, calculate the change in profit caused by a $15$ percent increase in sales revenue.

Complete this question by entering your answers in the tabs below.

Required $1$

R$$uired $3$

Using the degree of operating leverage, calculate the change in profit caused by a $15$ percent increase in sales revenue.

Note: Round your final answer to $2$ decimal places. $($i$.$e$.0\mathrm{.}1234$ should be entered as $12\mathrm{.}34\%.)$