Question

Assessment 5: (Algo) The Bake Shop (TBS) buys and sells cakes. To... LO 1-5

The Bake Shop (TBS) buys and sells cakes. To preserve freshness TBS donates cakes that have not been sold within 5 days to charitable organizations. To avoid waste TBS usually orders fewer cakes than it can sell. Sold out signs are frequently seen in the store. Even so, the cakes come in several flavors and occasionally some of the flavors do not sell out before the 5 day shelf life expires. Cakes cost $16 each to purchase and are sold for $22 each. During the most recent month TBS had customer orders for 28 cakes that could not be filled due to a lack of inventory. There were only 12 cakes that had to be donated to charity during the month. Based on this information the

Multiple Choice

• cost of waste amounted to $264.

• cost of waste amounted to $448.

• opportunity cost amounted to $336.

• opportunity cost amounted to $168.

Please show clear working with excel sheet and formulas where possible

Answer 1

Hhswer →CD opportunity Cost Amounted to $ 168 Opportunity cost : Opportunity cost is the cost that have not been caught up by the company by the another alternative. It is the benefit that company will be able to achieve but has not caught up by the company. Such alternative may or may not be benefit to company. Byt it depends on company's choice of to caught such opportunity or not. Opportunity cost = (selling price - Cost puise) x units to be sold. = $(22 - 16) X 28 Cakes $ 6 X 28 Cakes Opportunity cost : $168 : The Bake Shop (TBS) has opportunity cost of $ 188 if they do not sell 28 cakes .: Answer - Cd). Opportunity Gast amounted to $168. 2