Answered: Cove's Cakes is a local bakery. Price… | bartleby

FINANCIAL ACCOUNTING

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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Question

Cove's Cakes is a local bakery. Price and cost information follows:
Price per cake
Variable cost per cake
Ingredients
Direct labor
Overhead (box, etc.)
Fixed cost per month
13.81
2.34
1.09
0.21
$4,881.60
Required:
1. Determine Cove's break-even point in units and sales dollars.
2. Determine the bakery's margin of safety if it currently sells 580 cakes per month.
3. Determine the number of cakes that Cove must sell to generate $2,800 in profit.

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