Price per cake $ 13.11 Variable Cost per cake Ingredients $2.30 Direct Labor $1.17 Overhead (box etc) $0.16 Fixed Cost per month $3,602.40 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 $475 per month. c. Variable costs decreases by $0.37 per cake. 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.
Price per cake $ 13.11 Variable Cost per cake Ingredients $2.30 Direct Labor $1.17 Overhead (box etc) $0.16 Fixed Cost per month $3,602.40 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 $475 per month. c. Variable costs decreases by $0.37 per cake. 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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
| Price per cake | $ 13.11 |
| Variable Cost per cake | |
| Ingredients | $2.30 |
| Direct Labor | $1.17 |
| $0.16 | |
| Fixed Cost per month | $3,602.40 |
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 $475 per month.
c. Variable costs decreases by $0.37 per cake.
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.
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