Kylie's Cookies is considering the purchase of a larger oven that will cost $2,200 and will increase her fixed costs by $59. What would happen if she purchased the new oven to realize the variable cost savings of $0.10 per cookie, and what would happen if she raised her price by just $0.20? She feels confident that such a small price increase will decrease the sales by only 20 units and may help her offset the increase in fixed costs. Given the following current prices how would the break-even in units and dollars change if she doesn't increase the selling price and if she does increase the selling price? Complete the monthly contribution margin income statement for each of these cases. Round your answers to two decimal places. Round break-even units to a whole number. Selling Price, Variable Cost and Fixed Cost Change Analysis Sales Price per Unit Variable Cost per Unit Contribution Margin per Unit Fixed Costs Break-even in Units Break-even in Dollars Unit Sales, Expected Sales Variable Costs Contribution Margin Fixed Costs With Current Price $1.75 0.40 $ $1.35 $405 300 $525 With Current Price 800 With Decreased With Increased SP, VC and Decreased VCc, Increased FC and Increased FC Monthly Contribution Margin Income Statement With Decreased VC and Increased FC $ S S $ With Increased SP, Decreased VC, and Increased FC
Kylie's Cookies is considering the purchase of a larger oven that will cost $2,200 and will increase her fixed costs by $59. What would happen if she purchased the new oven to realize the variable cost savings of $0.10 per cookie, and what would happen if she raised her price by just $0.20? She feels confident that such a small price increase will decrease the sales by only 20 units and may help her offset the increase in fixed costs. Given the following current prices how would the break-even in units and dollars change if she doesn't increase the selling price and if she does increase the selling price? Complete the monthly contribution margin income statement for each of these cases. Round your answers to two decimal places. Round break-even units to a whole number. Selling Price, Variable Cost and Fixed Cost Change Analysis Sales Price per Unit Variable Cost per Unit Contribution Margin per Unit Fixed Costs Break-even in Units Break-even in Dollars Unit Sales, Expected Sales Variable Costs Contribution Margin Fixed Costs With Current Price $1.75 0.40 $ $1.35 $405 300 $525 With Current Price 800 With Decreased With Increased SP, VC and Decreased VCc, Increased FC and Increased FC Monthly Contribution Margin Income Statement With Decreased VC and Increased FC $ S S $ With Increased SP, Decreased VC, and Increased FC
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Kylie's Cookies is considering the purchase of a larger oven that will cost $2,200 and will increase her fixed costs by $59. What would happen if she purchased the new oven to realize the variable cost savings of $0.10 per cookie, and what would happen if she raised her price by just $0.20? She feels
confident that such a small price increase will decrease the sales by only 20 units and may help her offset the increase in fixed costs. Given the following current prices how would the break-even in units and dollars change if she doesn't increase the selling price and if she does increase the selling price?
Complete the monthly contribution margin income statement for each of these cases.
Round your answers to two decimal places. Round break-even units to a whole number.
Selling Price, Variable Cost and Fixed Cost Change Analysis
Sales Price per Unit
Variable Cost per Unit
Contribution Margin per Unit
Fixed Costs
Break-even in Units
Break-even in Dollars
Unit Sales, Expected
Sales
Variable Costs
Contribution Margin
Fixed Costs
Net Income
With Current
Price
$1.75
$
0.40
$1.35
$405
300
$525
Monthly Contribution Margin Income Statement
With Decreased
VC and
Increased FC
With Current
Price
800
With Decreased With Increased SP,
Decreased VC,
VC and
Increased FC
and Increased FC
$
$
with Increased SP,
Decreased VC,
and Increased FC
s
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