sanju ove's Cakes is a local bakery. Price and cost information follows: Price per cake $ 17.00 Variable cost per cake Ingredients 2.50Direct labor 1.40 Overhead (box, etc.) 0.20 Fixed costs per month 3,850.00 Required: Calculate Cove's new break-even pointunder each of the following independent scenarios: Sales price increases by $1.00 per cake. Fixed costs increase by $500 permonth. Variable costs decrease by $0.35 per cake. Sales price decreases by $0.50 per cake. Assume that Cove sold 400 cakeslast month. Calculate the company's degree of operating leverage. Using the degree of operating leverage, calculate thechange in profit caused by a 10 percent increase in sales revenue.

The break-even sales are the sales where the business earns no profit or loss during the period. The…

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

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter16: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 20E

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Lotts Company produces and sells one product. The selling price is 10, and the unit variable cost is 6. Total fixed cost is 10,000. Required: 1. Prepare a CVP graph with Units Sold as the horizontal axis and Dollars as the vertical axis. Label the break-even point on the horizontal axis. 2. Prepare CVP graphs for each of the following independent scenarios: (a) Fixed cost increases by 5,000, (b) Unit variable cost increases to 7, (c) Unit selling price increases to 12, and (d) Fixed cost increases by 5,000 and unit variable cost is 7.
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.…
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 $1.10 per cake. b. Fixed costs increase by $515 per month. c. Variable costs decrease by $0.30 per cake. d. Sales price decreases by $0.50 per cake. 2. Assume that Cove sold 485 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 9 percent increase in sales revenue. Required 1 $ 13.01 2.31 1.07 0.16 4,356.20 Complete this question by entering your answers in the tabs below. 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. a. Sales price increases by $1.10 per cake. b.…
Cove’s Cakes is a local bakery. Price and cost information follows: Price per cake $14.01 Variable cost per cake Ingredients 2.21 Direct labor 1.11 Overhead (box, etc.) 0.30 Fixed cost per month $4,156.00 Required: 1. Calculate Cove’s new break-even point under each of the following independent scenarios: a. Sales price increases by $1.50 per cake. b. Fixed costs increase by $515 per month. c. Variable costs decrease by $0.39 per cake. d. Sales price decreases by $0.60 per cake. 2. Assume that Cove sold 430 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.
Saved 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 $ 13.01 2.21 1.19 0.24 $4,216.50 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 $2,500 in profit. Complete this question by entering your answers in the tabs below. es Required 1 Required 2 Required 3 EDetermino the
Izzy Ice Cream has the following price and cost information: Price per 2-scoop sundae Variable costs per sundae: 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 $18,000. $5.00 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 $50,000, if sales price increases by $0.50 and variable costs increase by $0.30? Required 1 Required 2 1.35 0.45 0.20 $ 9,000 Complete this question by entering your answers in the tabs below. Break-even units Break-even sales Required 3 Required 4 Determine Izzy's break-even point in units and sales dollars. sundaes
ILLY Incam has the following price and cost internation. Price per 2-scoop sundae Variable costs per sundae: $ 5.00 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 $18,000. 1.35 0.45 0.20 $ 9,000 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 $50,000, if sales price increases by $0.50 and variable costs increase by $0.30? Complete this question by entering your answers in the tabs below. 3a. Sales price decreases by $0.50 3b. Fixed costs decrease by $300 per month 3c. Variable costs increase by $0.50 per sundae Required 1 Required 2 Required 3 Required 4 Calculate Izzy's…
Izzy Ice Cream has the following price and cost information: Price per 2-scoop sundae $ 5.00 Variable cost per sundae: Ingredients 1.35 Direct labor 0.45 Overhead 0.20 Fixed cost per month $ 5,400 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 $10,800. 3. Calculate Izzy’s new break-even point 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 $26,000, if sales price increases by $0.50 and variable costs increase by $0.30?
Izzy Ice Cream has the following price and cost information: 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…
Jolly Travel Agency specializes in flights between Toronto and Jamaica. It books passengers on Bolton Air. Jolly's fixed costs are $25,500 per month. Bolton Air charges passengers $1,300 per round-trip ticket. Read the requirement LOADING... . Begin by selecting the formula to calculate the breakeven points. Breakeven number of units = Fixed costs ÷ Contribution margin per unit Next, select the formula to calculate the number of tickets needed to meet the target operating income. Quantity of units required to be sold = ( Fixed costs + Target operating income ) ÷ Contribution margin per unit Now complete the requirement for each of the cases. Begin with case 1. Case 1: Jolly's variable costs are $44 per ticket. Bolton Air pays Jolly 6% commission on ticket price. Jolly must sell tickets to break even and…
Currently, Sweet Treats Bakery sells 1,200 cupcakes per month. The owners would like to increase net income above what is currently earned. Fixed costs are $1,500 per month and their contribution margin is $3 per cupcake. What would be a reasonable net income goal? O $1,800 O $2,600 O $2,100 O $5,600
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