Izzy Ice Cream has the following price and cost information: $5.00 Price per 2-scoop sundae Variable costs per sundae: Ingredients Direct labor 1.35 0.45 0.20 Overhead Fixed costs per month $ 3,900 Required: 1. Determine Izzy's break-even point in units and sales dollars. 2. Determine how many sundaes must be sold to generate a profit of $7,800. 3. Calculate Izzy's new break-even point in units for each of the following independent scenarios: a. Sales price decreases by $0.50. b. Fixed costs decrease by $300 per month. c. Variable costs increase by $0.50 per sundae. 4. Based on the original information, how many sundaes must Izzy sell to generate a profit of $16,000, if sales price increases by $0.50 and variable costs increase by $0.30?
Izzy Ice Cream has the following price and cost information: $5.00 Price per 2-scoop sundae Variable costs per sundae: Ingredients Direct labor 1.35 0.45 0.20 Overhead Fixed costs per month $ 3,900 Required: 1. Determine Izzy's break-even point in units and sales dollars. 2. Determine how many sundaes must be sold to generate a profit of $7,800. 3. Calculate Izzy's new break-even point in units for each of the following independent scenarios: a. Sales price decreases by $0.50. b. Fixed costs decrease by $300 per month. c. Variable costs increase by $0.50 per sundae. 4. Based on the original information, how many sundaes must Izzy sell to generate a profit of $16,000, if sales price increases by $0.50 and variable costs increase by $0.30?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Izzy Ice Cream has the following price and cost information:
Price per 2-scoop sundae
Variable costs per sundae:
$ 5.00
1.35
0.45
0.20
$ 3,900
Ingredients
Direct labor
Overhead
Fixed costs per month
Required:
1. Determine Izzy's break-even point in units and sales dollars,
2. Determine how many sundaes must be sold to generate a profit of $7,800.
3. Calculate Izzy's new break-even point in units for each of the following independent scenarios:
a. Sales price decreases by $0.50.
b. Fixed costs decrease by $300 per month.
c. Variable costs increase by $0.50 per sundae.
4. Based on the original information, how many sundaes must Izzy sell to generate a profit of $16,000, if sales price increases by
$0.50 and variable costs increase by $0.30?
Answer is complete but not entirely correct.
Complete this question by entering your answers in the tabs below.
Required 1 Required 2 Required 3
Based on the original information, how many sundaes must Izzy sell to generate a profit of $16,000, if sales price increases
by $0.50 and variable costs increase by $0.307
Note: Round your intermediate calculations to 2 decimal places and final answer to the nearest whole number.
4:063 sundans
Tamat salas
Required 4
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