The Gobblecakes bakery is considering selling chocolate chip cookies as well as cupcakes to attract more customers.
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The Gobblecakes bakery is considering selling chocolate chip cookies as well as cupcakes to attract more customers. The bakery estimates that cupcakes will account for 70 percent of its total sales, whereas cookies will account for 30 percent of sales. The annual fixed costs are $18,000. The variable cost of a cupcake is $0.90, and the selling price of a cupcake is $3.20. The variable cost of a cookie is $0.45 and the selling price is $2.50. How many units of each item, cupcakes and cookies, will the bakery need to sell to break even? What is the break-even point in sales dollars?
Related Book For
Managerial Economics
ISBN: 978-0133020267
7th edition
Authors: Paul Keat, Philip K Young, Steve Erfle
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