Homework Help is Here – Start Your Trial Now!
Business
Accounting
5) If Supla Dah renegotiates the contract at a price of $10 per cake, compute for total variable cost. 6) If Supla Dah renegotiates the contract at a price of $10 per cake, compute for total fixed cost.

5) If Supla Dah renegotiates the contract at a price of $10 per cake, compute for total variable cost. 6) If Supla Dah renegotiates the contract at a price of $10 per cake, compute for total fixed cost.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
See similar textbooks
icon
Related questions
Question
Answer 4, 5, 6
5) If Supla Dah renegotiates the contract at a price of $10 per cake, compute for total variable cost. 6) If Supla Dah renegotiates the contract at a price of $10 per cake, compute for total fixed cost. 7) If Supla Dah renegotiates the contract at a price of $10 per cake, compute for EBIT. 8)lf the store refuses to pay more than $8.00 per unit but is willing to negotiate quantity, welmat quantity of cakes will result to an EBIT of $4,000?
Transcribed Image Text:5) If Supla Dah renegotiates the contract at a price of $10 per cake, compute for total variable cost. 6) If Supla Dah renegotiates the contract at a price of $10 per cake, compute for total fixed cost. 7) If Supla Dah renegotiates the contract at a price of $10 per cake, compute for EBIT. 8)lf the store refuses to pay more than $8.00 per unit but is willing to negotiate quantity, welmat quantity of cakes will result to an EBIT of $4,000?
Ms. Magan Dah and her sister, Ms. Supla Dah got into the cakes and pastries business almost by accident. Magan, a BSHRM graduate, often bake cakes as gifts for friends. Occasionally, they would set up a booth at a trade fair and sell a few of the cakes. The day came when a buyer for a major department store offered them a contract to produce 1,500 cakes of various flavors for $10,000. The sisters realized that it was time to get down to business. To make bookkeeping simpler, they have priced all the cakes at $8. Variable cost per unit is $6 and they have to rent a facility for $4,000 a month. 1) Calculate the breakeven. 2) Calculate their COGS on the department store order. 3) Calculate their Operating Ex enses on the department store order. 4) Calculate their EBIT on the department store order.
Transcribed Image Text:Ms. Magan Dah and her sister, Ms. Supla Dah got into the cakes and pastries business almost by accident. Magan, a BSHRM graduate, often bake cakes as gifts for friends. Occasionally, they would set up a booth at a trade fair and sell a few of the cakes. The day came when a buyer for a major department store offered them a contract to produce 1,500 cakes of various flavors for $10,000. The sisters realized that it was time to get down to business. To make bookkeeping simpler, they have priced all the cakes at $8. Variable cost per unit is $6 and they have to rent a facility for $4,000 a month. 1) Calculate the breakeven. 2) Calculate their COGS on the department store order. 3) Calculate their Operating Ex enses on the department store order. 4) Calculate their EBIT on the department store order.
Expert Solution
steps

Step by step

Solved in 2 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Market Efficiency
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS