Question

Question 2 of 4 3.13 Betty Harris owns and operates CullumberCakes, a bakery that creates personalized birthday cakes for a child's first t cakes, which sell for $40 and feature an edible picture of the child, are shipped throughout the country. A typical mont as follows: Sales revenue Variable expenses Contribution margin Fixed expenses Operating income $812.000 609,000 203,000 111,500 $ 91,500 (a) Your answer is correct. How many cakes will Betty Harris have to sell if she wants to earn $148,000 in operating income each month? 25950 cakes

Answer 1

	Total	Per Unit
Sales	$812,000	$40
Variable expense	$609,000	$30
Contribution margin	$203,000	$10
Fixed expenses	$111,500
	$91,500
Target Units in sales	28,750	cakes
(Fixed cost + Target Income/(1 - tax rate))/Contributin margin per unit
($111,500 + $114,400/0.65)/$10