Sarah Allen owns and operates Blossom, a bakery that creates personalized birthday cakes for a child's first birthday. The cakes, which sell for $56 and feature an edible picture of the child, are shipped throughout the country. A typical month's results are as follows: Sales revenue Variable expenses Contribution margin Fixed expenses Operating income $944,720 708,540 236,180 123,620 $112,560

Sarah Allen owns and operates Blossom, a bakery that creates personalized birthday cakes for a child's first birthday. The cakes, which sell for $56 and feature an edible picture of the child, are shipped throughout the country. A typical month's results are as follows: Sales revenue Variable expenses Contribution margin Fixed expenses Operating income $944,720 708,540 236,180 123,620 $112,560

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: What is Day's-sales-outstanding ratio?

A: Ratio analysis: The analysis of a company using the financial ratios and comparing its trends and…

Q: If total fixed costs decrease while the sale price per unit and the variable cost per unit remain…

A: Contribution margin = Sales price per unit - Variable cost per unit Therefore, there is no impact…

Q: which of the following occurs if a company decreases its selling price per unit? a. net income…

A: The contribution margin is calculated as difference between sales and variable costs. The…

Q: Data for Hermann Corporation are shown below: Selling price Variable expenses Contribution margin…

A: Net Operating Income is the investment property's total revenue. Net operating income (NOI) is…

Q: e the company's overall profit if it sells exactly the break-even qua

A: Breakeven Point is a point at which the company makes no profit or loss. It is where the…

Q: Cost, revenue, and profit are in dollars and x is the number of units. If the total profit function…

A: Hello. Since your question has multiple parts, and the first part has incomplete information we will…

Q: In the month of March, Blossom Salon services 620 clients at an average price of $120. During the…

A: Variable costs are costs that varies with the change in the level of output whereas fixed costs are…

Q: Cost Analysis is based on the time value of money. This means a dollar today is worth more than a…

A: Cost Analysis is based on Time value of money. This means a dollar today is worth more than a dollar…

Q: In the month of March, Carla Vista Salon serviced 630 clients at an average price of $160. During…

A: Cost volume profit analysis is the technique used by management for the calculation of break-even…

Q: decreases increases remains th

A: When the selling price per unit decreases, the contribution margin per unit decreases because…

Q: What is the effect of an increase in variable costs as a percentage of sales onthe contribution…

A: Variable cost refers to the cost which varies according to the volume of produced units. Increase in…

Q: The variable expense ratio equals

A: Contribution Margin Ratio :— It is calculated by dividing contribution by sales.…

Q: Compute breakeven sales. (Use the rounded contribution margin ratio calculated in the previous part…

A: Break-even point is the point at which the entity does not make any profit or loss That is Selling…

Q: The contribution margin ratio always increases when the: a. Break-even point increases. b.…

A: Contribution Margin ratio = (Sales Revenue per Unit - Variable Expenses per Unit) / Sales Revenue…

Q: Whirly has the following information for 2015. They sell Flying Carpets. Sales Contribution Margin…

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

Q: Calculate the break-even point in units. units Calculate the break-even point in sales revenue.…

A: Introduction:- CVP analysis is used to identify the changes in costs and volume affect a…

Q: All else being equal, what happens to the unit contribution margin and the contribution margin ratio…

A: Contribution margin is the margin of profits of any enterprise which is essentially a function of…

Q: What can the weighted average contribution margin ratio be used for? To solve for a measure,…

A: The weighted average contribution margin ratio is a key financial metric that can be used for…

Q: Draw up a marginal statement that calculates the contribution per uni

A: Marginal costing seems to be a costing method whereby all variable expenses are included in the…

Question

A) what is blossoms contribution margin per unit? B) what is blossoms monthly breakeven point? C) what is blossoms contribution margin ratio? What is blossoms monthly breakeven point in sales dollars?

Sarah Allen owns and operates Blossom, a bakery that creates personalized birthday cakes for a child's first birthday. The cakes, which
sell for $56 and feature an edible picture of the child, are shipped throughout the country. A typical month's results are as follows:
Sales revenue
Variable expenses
Contribution margin
Fixed expenses
Operating income
$944,720
708,540
236,180
123,620
$112,560

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1: Explanation of Contrbution Margin and Break-even Point

VIEW

Step 2: Calculation of Contrbution Margin and Break-even Point

VIEW

Solution

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

What is the break-even point in sales dollars? Break-even point $
The ratio of contribution margin in dollars to the selling price is the: Select one: O profit margin. O break-even point in unit sales. O contribution margin ratio. O net income
Which of the following is true of a variable cost? Total variable cost remains constant with changes in the number of goods sold. Unit variable cost decreases with an increase in production. Unit variable cost remains constant with changes in production. Total variable cost decreases with an increase in the number of goods sold.
Given the following notations, what is the breakeven sales level in units? SP =selling price per unit FC = total fixed cost VC = variable cost per unit A. SP / (FC/VC)B. FC/(VC/SP)C. VC/(SP – FC)D. FC/(SP – VC)
1
Given that the total cost, C, is related to sales volume, x, by the equation y=1000+0.2x, say true or false for the following and proof it. (a) The cost-sales line rises $2 for each increase of $10 in sales volume. (b) The slope of the line is interpreted as variable cost
Which of the following is true regarding the contribution margin ratio of a company that produces only a single product? Select one: a. The contribution margin ratio equals the selling price per unit less the variable expense ratio. b. The contribution margin per unit multiplied by the selling price per unit equals the contribution margin ratio. c. None of the given answer is correct. d. As fixed expenses decrease, the contribution margin ratio increases. e. The contribution margin ratio will decline as unit sales decline.
The correlation (r) between the price of a product (x) and average daily sales (y) is –0.95. Complete the following statements: a) The coefficient of determination is b) The coefficient of non-determination is
How many statements below regarding margin of safety are correct? 1. It is the amount by which sales can be reduced without incurring a loss. 2. It is the difference between budgeted sales and breakeven sales. 3. It can be expressed in terms of unit, pesos or percentage of sales. 4. Its presence indicates that the company expects profit. 5. The product of margin of safety units and unit contribution margin is the projected profit for the period. 6. The higher the margin of safety, the lower is the risk of incurring operating loss. 3 4
The difference, (Total Revenue - Total Cost) or [(Unit Price x Quantity Sold) - (Fixed Cost + Variable Cost)], represents, O the break-even point O the profit equation O the sales ratio O the market share O the value equation
The contribution margin ratio always increases when (you may select more thanone answer):a. Sales increase.b. Fixed costs decrease.c. Total variable costs decrease.d. Variable costs as a percent of sales decrease
If selling price is $2.08 and cost is $1.60, what is the price/cost ratio?