price per cake | 17 | ||||||
Variable cost per cake | |||||||
ingredients | 2.5 | ||||||
Direct labor | 1.4 | ||||||
overhead | 0.2 | 4.1 | |||||
Contribution margin per cake | 12.9 | ||||||
contribution margin ratio= | 12.9/17= | 0.758824 | |||||
Break even point(units) = fixed cost/contribution margin per unit | |||||||
BEP (dollars) = | fixed cost/contribution margin ratio | ||||||
1a) | when sale increases by $1.00 per cake | ||||||
contribution will also increase by the same amount | |||||||
3850/(12.9+1) | |||||||
BEP | 277 | Cakes | answer | ||||
b) | fixed cost increase by 500 per month | ||||||
(3850+500)/12.9 | |||||||
337 | |||||||
BEP | 337 | Cakes | answer | ||||
c) | Variable cost decrease by 0.35 per caje | ||||||
leading to increase in contribution | |||||||
(3850)/(12.9+.35) | |||||||
291 | |||||||
BEP | 291 | Cakes | answer | ||||
d) | when sale decreases by $.50 per cake | ||||||
contribution will also decrease by the same amount | |||||||
3850/(12.9-.5) | |||||||
BEP | 310 | Cakes | answer | ||||
2) | contibution (400*12.9)= | 51600 | |||||
less fixed cost | -3850 | ||||||
net income | 47750 | ||||||
degree of operating leverage = contribution/net income | |||||||
51600/47750 | |||||||
1.0806 | |||||||
3) | Effect on profit = | increase of sales revenue *degree of operating leverage | |||||
10%*1.0806 | |||||||
10.806 | % | ||||||
Effect on profit | 10.81% | ||||||
Cove's Cakes is a local bakery. Price and cost information follows: 1.40 Price per cake $...
Cove's Cakes is a local bakery. Price and cost information follows: $ 17.00 points Price per cake Variable cost per cake Ingredients Direct labor Overhead (box, etc.) Fixed cost per month Skipped 2.50 1.40 0.20 $3,850.00 Print Required: 1. Calculate Cove's new break-even point under each of the following independent scenarios: a. Sales price increases by $1.00 per cake. b. Fixed costs increase by $500 per month. c. Variable costs decrease by $0.35 per cake. d. Sales price decreases by...
Cove's Cakes is a local bakery. Price and cost information follows: $ 17.00 Price per cake Variable cost per cake Ingredients Direct labor Overhead (box, etc.) Fixed cost per month 2.50 1.40 0.20 $3,850.00 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 $1.00 per cake. Break-Even Point - cakes b. Fixed costs increase by $500 per month Break-Even Point cakes c....
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 $2,970.00 Required: 1. Calculate Cove's new break-even point under each of the following independent scenarios a. Sales price increases by $1.60 per cake, b. Foxed costs increase by $490 per month c. Variable costs decrease by $0.30 per cake. d. Sales price decreases by $0.80 per cake. 2. Assume that Cove sold...
Cove's Cakes is a local bakery. Price and cost information follows: $ 14.81 Price per cake Variable cost per cake Ingredients Direct labor Overhead (box, etc.) Fixed cost per month 2.28 1.13 0.24 $4,240.80 Required: 1. Calculate Cove's new break-even point under each of the following independent scenarios: a. Sales price increases by $1.60 per cake. b. Fixed costs increase by $465 per month. c. Variable costs decrease by $0.35 per cake. d. Sales price decreases by $0.30 per cake....
Cove's Cakes is a local bakery. Price and cost information follows: $ 13.81 Price per cake Variable cost per cake Ingredients Direct labor Overhead (box, etc.) Fixed cost per month 2.31 1.02 0.20 $4,112.00 Required: 1. Calculate Cove's new break-even point under each of the following independent scenarios: a. Sales price increases by $1.30 per cake. b. Fixed costs increase by $530 per month. c. Variable costs decrease by $0.31 per cake. d. Sales price decreases by $0.80 per cake....
Cove's Cakes is a local bakery. Price and cost information follows: $ 13.41 Price per cake Variable cost per cake Ingredients Direct labor Overhead (box, etc.) Fixed cost per month 2.26 1.14 0.11 $2,970.00 Required: 1. Calculate Cove's new break-even point under each of the following independent scenarios: a. Sales price increases by $1.30 per cake. b. Fixed costs increase by $460 per month. c. Variable costs decrease by $0.27 per cake. d. Sales price decreases by $0.40 per cake....
Cove's Cakes is a local bakery. Price and cost information follows: $ 13.01 Price per cake Variable cost per cake Ingredients Direct labor Overhead (box, etc.) Fixed cost per month 2.15 1.03 0.23 $3,360.00 Required: 1. Calculate Cove's new break-even point under each of the following independent scenarios: a. Sales price increases by $1.40 per cake. b. Fixed costs increase by $480 per month. c. Variable costs decrease by $0.30 per cake. d. Sales price decreases by $0.40 per cake....
Cove's Cakes is a local bakery. Price and cost information follows: $ 15.01 Price per cake Variable cost per cake Ingredients Direct labor Overhead (box, etc.) Fixed cost per month 2.18 1.03 0.12 $4,905.60 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 $1.70 per cake. Break-Even Point - cakes ] b. Fixed costs increase by $490 per month Break-Even Point -...
Cove's Cakes is a local bakery. Price and cost information follows: $ 14.61 Price per cake Variable cost per cake Ingredients Direct labor Overhead (box, etc.) Fixed cost per month 2.32 1.02 0.28 $3,297.00 Required: 1. Calculate Cove's new break-even point under each of the following independent scenarios: a. Sales price increases by $1.70 per cake. b. Fixed costs increase by $515 per month. c. Variable costs decrease by $0.32 per cake. d. Sales price decreases by $0.70 per cake....
mework, Part 2 Saved Cove's Cakes is a local bakery. Price and cost information follows: $ 13.21 Price per cake Variable cost per cake Ingredients Direct labor Overhead (box, etc.) Fixed cost per month 2.16 1.05 0.27 $3,502.80 Required: 1. Calculate Cove's new break-even point under each of the following independent scenarios: a. Sales price increases by $1.20 per cake. b. Fixed costs increase by $505 per month. c. Variable costs decrease by $0.26 per cake. d. Sales price decreases...