Selling price per Custom wedding cake	$800
Variable cost per Custom wedding cake	$425
Total fixed costs	$72,500

Using the above information, calculate the following items, being sure to show all calculations and clearly labeling your answers:

1. Contribution margin per unit

2. Contribution margin ratio (do not round your answer)

3. Break-even point in units

4. Break-even point in dollars

4. Explain what happens at the break-even point and why companies do not want to remain at the

break-even point.

5. How many Custom wedding cakes need to be sold in order to realize a target profit

of $50,000? Show all calculations and clearly label your answer.

6. What dollar sales will this business need to generate in order to realize a target profit of $50,000?

Show all calculations and clearly label your answer.