Carol is a baker who owns a small bakery called Pie in the Sky that sells cherry pies. She has been debating adding new pies into herofferings, including blackberry and apple. Carol is preparing a budgeted income statement for April so she can compare budgeted netincome, when selling just cherry pies, to budgeted net income when selling other types of pies as well. She has decided that she will beable to sell the pies for the following prices: Cherry, $10; Blackberry, $8; and Apple, $11. Carol will be able to produce 440 pies amonth regardless of what kinds of pies she chooses to bake and sell. The pies have the following costs associated with them:Cherry (per pie)Crust $0.20Filling $0.65Topping $0.40RentCarol took out a $9,000 loan with an Annual Percentage Rate (APR) of 12% to begin her business, and she will have a flat tax rate of21%. Her monthly fixed selling, general, and administrative (SG&A) expenses include the following:Phone and UtilitiesBlackberry (per pie)Apple (per pie)$0.20Crust $0.20$0.72Filling$0.70$0.24 Topping $0.34InsuranceBaking SuppliesCrustFillingTopping$2,200$480$130$680 (b)Assuming that Carol proceeds with selling only cherry pies, what would her gross margin and budgeted net income be for April?(Round answers to 2 decimal places, e.g. 52.75.)Gross marginBudgeted net income for AprilSave for Later$$Attempts: 0 of 1 used Submit Answer

The budgeted net income is computed by deducting the administrative and selling expenses from the…

Carol is a baker who owns a small bakery called Pie in the Sky that sells cherry pies. She has been debating adding new pies into her offerings, including blackberry and apple. Carol is preparing a budgeted income statement for April so she can compare budgeted net income, when selling just cherry pies, to budgeted net income when selling other types of pies as well. She has decided that she will be able to sell the pies for the following prices: Cherry, $10; Blackberry, $8; and Apple, $11. Carol will be able to produce 440 pies a month regardless of what kinds of pies she chooses to bake and sell. The pies have the following costs associated with them: Cherry (per pie) Blackberry (per pie) Apple (per pie) Crust $0.20 $0.20 Crust $0.20 Filling $0.65 Filling $0.72 Filling $0.70 Topping $0.40 Topping $0.24 Topping $0.34 Carol took out a $9,000 loan with an Annual Percentage Rate (APR) of 12% to begin her business, and she will have a flat tax rate of 21%. Her monthly fixed selling, general, and administrative (SG&A) expenses include the following: Rent Phone and Utilities Insurance Crust Baking Supplies $2,200 $480 $130 $680

Carol is a baker who owns a small bakery called Pie in the Sky that sells cherry pies. She has been debating adding new pies into her offerings, including blackberry and apple. Carol is preparing a budgeted income statement for April so she can compare budgeted net income, when selling just cherry pies, to budgeted net income when selling other types of pies as well. She has decided that she will be able to sell the pies for the following prices: Cherry, $10; Blackberry, $8; and Apple, $11. Carol will be able to produce 440 pies a month regardless of what kinds of pies she chooses to bake and sell. The pies have the following costs associated with them: Cherry (per pie) Blackberry (per pie) Apple (per pie) Crust $0.20 $0.20 Crust $0.20 Filling $0.65 Filling $0.72 Filling $0.70 Topping $0.40 Topping $0.24 Topping $0.34 Carol took out a $9,000 loan with an Annual Percentage Rate (APR) of 12% to begin her business, and she will have a flat tax rate of 21%. Her monthly fixed selling, general, and administrative (SG&A) expenses include the following: Rent Phone and Utilities Insurance Crust Baking Supplies $2,200 $480 $130 $680

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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