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Prairie Fields Bakery is a bakery specializing in pies. They are exploring options for expanding their product line by baking and selling cakes. The sale price for each cake will be $15. The following cost information has been provided: Variable Costs: Direct Materials Direct Labor Fixed Costs: Administrative Costs Utilities Rent $3.40 $1.50 $2,540 $350 $1,200

Prairie Fields Bakery is a bakery specializing in pies. They are exploring options for expanding their product line by baking and selling cakes. The sale price for each cake will be $15. The following cost information has been provided: Variable Costs: Direct Materials Direct Labor Fixed Costs: Administrative Costs Utilities Rent $3.40 $1.50 $2,540 $350 $1,200

FINANCIAL ACCOUNTING
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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Prairie Fields Bakery is a bakery specializing in pies. They are exploring options for expanding their product line by baking and selling cakes. The sale price for each cake will be $15. The following cost information has been provided: Variable Costs: Direct Materials Direct Labor Fixed Costs: Administrative Costs Utilities Rent $3.40 $1.50 $2,540 $350 $1,200
Transcribed Image Text:Prairie Fields Bakery is a bakery specializing in pies. They are exploring options for expanding their product line by baking and selling cakes. The sale price for each cake will be $15. The following cost information has been provided: Variable Costs: Direct Materials Direct Labor Fixed Costs: Administrative Costs Utilities Rent $3.40 $1.50 $2,540 $350 $1,200
You are a cost accountant for Prairie Fields Bakery, and you would like to analyze the cost-volume-profit for the proposed cake line. You will present your analysis to management. Your approach is to create a dashboard with the following visualizations: 1. 2. 3. 4. 5. Contribution Margin per Unit - This is a pie chart showing the contribution margin per unit as a pie slice and the total variable cost per unit as another pie slice. The total sales price per unit is also displayed in the center. Variable Costs per Unit - This is a pie chart showing the direct labor per unit as a pie slice and the direct materials per unit as another pie slice. The total variable costs per unit is shown in the center. Total Fixed Costs - This is a pie chart showing the administrative, utilities and rent costs as pie slices. The total fixed costs value is shown in the center. Operating Income by Sales Unit - This is a bar chart showing the operating income for sales units from 0 to 1000 (in increments of 100). Cost-Volume-Profit Graph - This is a line chart showing the total revenue, total fixed costs, and total costs for sales units from 0 to 1000 (in increments of 100). (a2) What is the margin of safety in units and sales dollars if 800 cakes are sold? Margin of safety in units Margin of safety in dollars $ eTextbook and Media 395.05 5925.74 units Assistance Used
Transcribed Image Text:You are a cost accountant for Prairie Fields Bakery, and you would like to analyze the cost-volume-profit for the proposed cake line. You will present your analysis to management. Your approach is to create a dashboard with the following visualizations: 1. 2. 3. 4. 5. Contribution Margin per Unit - This is a pie chart showing the contribution margin per unit as a pie slice and the total variable cost per unit as another pie slice. The total sales price per unit is also displayed in the center. Variable Costs per Unit - This is a pie chart showing the direct labor per unit as a pie slice and the direct materials per unit as another pie slice. The total variable costs per unit is shown in the center. Total Fixed Costs - This is a pie chart showing the administrative, utilities and rent costs as pie slices. The total fixed costs value is shown in the center. Operating Income by Sales Unit - This is a bar chart showing the operating income for sales units from 0 to 1000 (in increments of 100). Cost-Volume-Profit Graph - This is a line chart showing the total revenue, total fixed costs, and total costs for sales units from 0 to 1000 (in increments of 100). (a2) What is the margin of safety in units and sales dollars if 800 cakes are sold? Margin of safety in units Margin of safety in dollars $ eTextbook and Media 395.05 5925.74 units Assistance Used
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