Ms. Magan Dah and her sister, Ms. Supla Dah got into the cakes and pastries business almost by accident. Magan, a BSHRM graduate often bake cakes as gifts for friends: Occasionally, they would set up a booth at a trade fair and sell a few of the cakes. The day came when a buyer for a major department store offered them a contract to produce 1,500 cakes of various flavors for $10.000. The sisters realized that it was time to get down to business. To make bookkeeping simpler, they have priced all the cakes at $8 Variable cost per unit is $6 and they have to rent a facility for $4,000 a month 4) Calculate their EBIT on the department store order. 8)If the store refuses to pay more than $58.00 per unit but is willing to negotiate quantity, what quantity of cakes will result to an EBIT of $4,000?
Ms. Magan Dah and her sister, Ms. Supla Dah got into the cakes and pastries business almost by accident. Magan, a BSHRM graduate often bake cakes as gifts for friends: Occasionally, they would set up a booth at a trade fair and sell a few of the cakes. The day came when a buyer for a major department store offered them a contract to produce 1,500 cakes of various flavors for $10.000. The sisters realized that it was time to get down to business. To make bookkeeping simpler, they have priced all the cakes at $8 Variable cost per unit is $6 and they have to rent a facility for $4,000 a month 4) Calculate their EBIT on the department store order. 8)If the store refuses to pay more than $58.00 per unit but is willing to negotiate quantity, what quantity of cakes will result to an EBIT of $4,000?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Ms. Magan Dah and her sister, Ms. Supla Dah got into the cakes and pastries business almost by accident. Magan, a BSHRM graduate often bake cakes as gifts for friends: Occasionally, they would set up a booth at a trade fair and sell a few of the cakes. The day came when a buyer for a major department store offered them a contract to produce 1,500 cakes of various flavors for $10.000. The sisters realized that it was time to get down to business. To make bookkeeping simpler, they have priced all the cakes at $8 Variable cost per
unit is $6 and they have to rent a facility for $4,000 a month
4) Calculate their EBIT on the department store order.
8)If the store refuses to pay more than $58.00 per unit but is willing to negotiate quantity, what quantity of cakes will result to an EBIT
of $4,000?
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