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 costs per month Required: 1. Calculate Cove's new break-even point under each of the following independent scenarios: a. Sales price increases by $1.80 per cake. b. Fixed costs increase by $505 per month. $ 13.61 2.27 1.05 0.17 4,351.60 c. Variable costs decrease by $0.37 per cake. d. Sales price decreases by $0.50 per cake. 2. Assume that Cove sold 450 cakes last month. Calculate the company's degree of operating leverage. 3. Using the degree of operating leverage, calculate the change in profit caused by a 15 percent increase in sales revenue. Complete this question by entering your answers in the tabs below. Required 3 Required 1 Required 2 Calculate Cove's new break-even point under each of the following independent scenarios: Note: Round your answers to the nearest whole number. a. Sales price increases by $1.80 per cake. b. Fixed costs increase by $505 per month. c. Variable costs decrease by $0.37 per cake. d. Sales price decreases by $0.50 per cake. Break-Even Point Show less A

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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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 costs per month
Required:
1. Calculate Cove's new break-even point under each of the following independent scenarios:
a. Sales price increases by $1.80 per cake.
b. Fixed costs increase by $505 per month.
c. Variable costs decrease by $0.37 per cake.
$ 13.61
2.27
1.05
0.17
4,351.60
d. Sales price decreases by $0.50 per cake.
2. Assume that Cove sold 450 cakes last month. Calculate the company's degree of operating leverage.
3. Using the degree of operating leverage, calculate the change in profit caused by a 15 percent increase in sales revenue.
Complete this question by entering your answers in the tabs below.
Required 1 Required 2
Required 3
Calculate Cove's new break-even point under each of the following independent scenarios:
Note: Round your answers to the nearest whole number.
1a Salas nrice increases hy $1 A0 ner raka
a. Sales price increases by $1.80 per cake.
b. Fixed costs increase by $505 per month.
c. Variable costs decrease by $0.37 per cake.
d. Sales price decreases by $0.50 per cake.
Break-Even Point
Trakes
Show less A
Transcribed Image Text: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 costs per month Required: 1. Calculate Cove's new break-even point under each of the following independent scenarios: a. Sales price increases by $1.80 per cake. b. Fixed costs increase by $505 per month. c. Variable costs decrease by $0.37 per cake. $ 13.61 2.27 1.05 0.17 4,351.60 d. Sales price decreases by $0.50 per cake. 2. Assume that Cove sold 450 cakes last month. Calculate the company's degree of operating leverage. 3. Using the degree of operating leverage, calculate the change in profit caused by a 15 percent increase in sales revenue. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Calculate Cove's new break-even point under each of the following independent scenarios: Note: Round your answers to the nearest whole number. 1a Salas nrice increases hy $1 A0 ner raka a. Sales price increases by $1.80 per cake. b. Fixed costs increase by $505 per month. c. Variable costs decrease by $0.37 per cake. d. Sales price decreases by $0.50 per cake. Break-Even Point Trakes Show less A
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