Question

Julianna Abdallah owns and operates FirstCakes, a bakery that creates personalized birthday cakes for a child's first birthday. The cakes, which sell for $60 and feature an edible picture of the child, are shipped throughout the country. A typical month's results are as follows: Sales revenue Variable expenses Contribution margin Fixed expenses Operating income $873,600 655,200 218,400 116,550 $ 101,850 (a) Your answer is correct. How many cakes will Julianna Abdallah have to sell if she wants to earn $120,060 in operating income each month? 15774 cakes e Textbook and Media Attempts: 3 of 12 used (b) . Your answer is incorrect. Assuming a 35% tax rate, how many cakes will Julianna Abdallah have to sell if she wants to earn $105,885 in net income each month? (Round answer to 0 decimal places, e.g. 5,275.) cakes

Answer 1

Answer :-

Contribution Margin per unit = $15 ( $60 - $45)

No. of cakes to sell to earn $105,885 with 35% tax rate.

Total Operating Profit = Desired Profit + Tax 30%

Total Operating Profit = $105,885 + $57,015

Total Operating Profit = $162,900

No. Of units to sell = $116,550 + $162,900 / $15

No. Of units to sell = 18,630

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