Cove's Cakes is a local bakery. Price and cost information follows:Price per cakeVariable cost per cakeIngredientsDirect laborOverhead (box, etc.)Fixed costs per monthRequired: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 $0.37 per cake.$ 13.612.271.050.174,351.60d. 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 2Required 3Calculate 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 rakaa. 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 PointTrakesShow less A

A variable cost is one that changes depending on how much is produced or sold by the company.…

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

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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Explain what contribution margin on a per unit basis and contribution margin ratio is to the management of Motors Ltd. Motors Ltd sells small motors as a component part to automobiles. The Model 101 motor sells for $850 and has per-unit variable costs of $400 associated with its production. The company has fixed expenses of $90,000 per month. In August, the company sold 425 of the Model 101 motors. A. Calculate the contribution margin per unit for their Model 101. B. Calculate the contribution margin ratio of their Model 101. C. Prepare a contribution margin income statement for the month of August.
= Adam's Repair Shop has a monthly target operating income of $12,500. Variable expenses are 75% of sales, and monthly fixed expenses are $9,500. Hint: The contribution margin ratio= 100% - Variable expenses percentage of sales. Read the requirements. Requirement 1. Compute the monthly margin of safety in dollars if the shop achieves its income goal. Begin by identifying the formula to compute the margin of safety. = Margin of safety in dollars (Round intermediate calculations up to the nearest whole dollar and your final answer to the nearest whole dollar.) The margin of safety is Requirement 2. Express Adam's margin of safety as a percentage of target sales. Begin by identifying the formula to compute the margin of safety as a percentage of target sales. (Round the percentage to the nearest whole percent.) The margin of safety percentage is % of target sales. Requirement 3. What is Adam's operating leverage factor at the target level of operating income? Begin by identifying the…
Gladstorm Enterprises sells a product for $50 per unit. The variable cost is $32 per unit, while fixed costs are $9,504. Determine the break-even point in sales units. Round answer to the nearest whole number. units Determine the break-even point in sales units if the selling price was increased to $65 per unit. Round answer to the nearest whole number. units
Stuart Trophies makes and sells trophies it distributes to little league ballplayers. The company normally produces and sells between 10,000 and 16,000 trophies per year. The following cost data apply to various activity levels: Required Complete the following table by filling in the missing amounts for the levels of activity shown in the first row of the table. Note: Round "Cost per unit" answers to 2 decimal places. Number of Trophies Total costs incurred Fixed Variable Total costs Cost per unit Fixed Variable Total cost per trophy $ 66,000 $ 42,000 $ 108,000 $ $ 10,000 $ 6.60 4.20 10.80 12,000 $' 14,000 4,20 4.20 $ 66,000 $ 66,000 $ 66,000 50,400 58,800 67,200 116,400 $ 124,800 $ 133,200 4.20 4.20 16,000 $ 4.20 4.20
Variable and Absorption Costing-Service CompanyReally BC, Inc. prepares a variable costing income statement for internal management and an absorption costing income statement for its bank. Really BC provides a quarterly lawn care service that is sold for $190. The variable and fixed cost data are as follows: Direct labor $100.00 Overhead Variable cost per unit $33.00 Fixed cost (annual) $100,000 Marketing, general and administrative Variable cost (per service contract completed) $34.00 Administrative expenses (fixed- annual cost) $42,000 During 2016, 10,000 service contracts were signed and 9,500 service contracts were completed. Lawn RX had no service contracts at the beginning of the year. a. Calculate reported income for management.Do not use negative signs with any answers. Absorption Costing Income Statement Sales Answer Cost of Goods Sold: Beginning Inventory Answer Variable…
not graded.... Variable and Absorption Costing-Service CompanyLawn RX, Inc. prepares a variable costing income statement for internal management and an absorption costing income statement for its bank. Lawn RX provides a quarterly lawn care service that is sold for $160. The variable and fixed cost data are as follows: Direct labor $100.00 Overhead Variable cost per unit $10.00 Fixed cost (annual) $100,000 Marketing, general and administrative Variable cost (per service contract completed) $11.00 Administrative expenses (fixed- annual cost) $42,000 During 2016, 10,000 service contracts were signed and 9,500 service contracts were completed. Lawn RX had no service contracts at the beginning of the year. a. Calculate reported income for management.Do not use negative signs with any answers. Absorption Costing Income Statement Sales Answer Cost of Goods Sold: Beginning Inventory Answer…
Cove's Cakes is a local bakery. Price and cost information follows: Price per cake Variable cost per cake Ingredients $ 14.61 2.31 1.13 Overhead (box, etc.) 0.28 Fixed costs per month 4,464.90 Direct labor Required: 1. Determine Cove's break-even point in units and sales dollars. 2. Determine the bakery's margin of safety in sales dollars if it currently sells 480 cakes per month. 3. Determine the number of cakes that Cove must sell to generate $1,900 in profit. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Determine Cove's break-even point in units and sales dollars. Note: Round your Break-Even Units answer to the nearest whole number. Round your other intermediate calculations and sales dollars answer to 2 decimal places. Break-Even Units Break-Even Sales Dollars Cakes
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 $ 14.41 2.24 1.16 0.25 $4,842.00 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 540 cakes per month. 3. Determine the number of cakes that Cove must sell to generate $2,100 in profit. tA

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