The Eastwood Cake Factory sells chocolate cakes, birthdaydecorated cakes, and specialty cakes. The factory isexperiencing a bottleneck and is trying to determine whichcake is more profitable. Even though the company may haveto limit the orders that it takes, Eastwood is concerned aboutcustomer service and satisfaction.ChocolateBirthdaySpecialtyCakeCakeCakeSales price$20.00$45.00SE0.00Variable cost per cake$5.00$12.00$20.00Hours needed to bake,frast, and decorate1 hour2.5 hours2 haursDetermine which cake the company should concentrate onproducing first and then second and finally third.Select one:a. Birthcay, Chocolate, SpecialtyOb. Specialty, Birthday, Chacolatec. Chocalate, Birthday, SpecialtyOd. Specialty, Chocolate, Birthday

Contribution Margin:-It is the difference between the Sales and variable cost of the product.…

Answered: The Eastwood Cake Factory sells…

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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Pick-Me-Up Company is introducing a new high caffeine coffee in its stores and must decide what price to set for the coffee beans. An estimated demand schedule for the product is as follows: Price 1 Lb. units demanded $4.50 87,500 $5.00 75,500 $5.50 57,200 $6.00 47,800 $6.50 35,700 $7.00 26,300 Estimated costs are as follows: Variable manufacturing costs per unit $1.50 Fixed manufacturing cost per year $40,900 Variable selling & administrative costs per unit $0.50 Fixed selling & administrative costs per year $21,600 Prepare a schedule showing management the total revenue, total cost, and total profit or loss for each selling price.At what price do you recommend Pick-Me-Up Company should choose. Price Demand Total Revenue Variable Costs Fixed Costs Total Costs Total Profit (Loss) $4.50 $5.00 $5.50 $6.00 $6.50 $7.00
Company XYZ is a farming company . The company are famous for producing strawberries and blueberries . The variable cost of producing and selling one box of strawberries is $ 3 , while the variable costo producing and selling one box blueberries is $ 5 . Each box of strawberries is selling for $ 10.while a box of blueberries sells for $ 13 . The company produces and sells 5 boxes of strawberries for every 2 boxe of blueberries . Assuming a fixed cost of $ 204,000 . How many boxes of strawberries need to be produced and sold to achieve breakeven ? the given answers OC 20.000 d . 4.000 e 1.600
Sleepy Time is a retailer of luxury bed frames located in Los Angeles, California. Due to a recent industry-wide financial crisis, the CFO of Sleepy Time fears a significant drop in the firm's upcoming income stream. The CFO asked you to use the company financial information provided below. Sales price per unit $ 3,250.00 Per-unit variable costs: Invoice cost 2,468.80 Sales commissions 331.20 Total per-unit variable costs $ 2,800.00 Total annual fixed costs: Advertising $ 236,500 Rent 178,500 Salaries 386,500 Total annual fixed costs $ 801,500 If 4,250 bed frames were sold, Sleepy Time's operating income (πB) would be: (Do not round intermediate calculations.)
Piedmont Fasteners Corporation makes three different clothing fasteners in its manufacturing facility in North Carolina. All three products are sold in highly competitive markets, so the company is unable to raise prices without losing an unacceptable number of customers. Data from the most recent period concerning these products appear below: Annual sales volume Velcro 101,800 Metal 203,600 Nylon 407,200 Unit selling price $ 1.65 $ 1.50 $ 0.85 Variable expense per unit $ 1.25 $ 0.70 Contribution margin per unit $ 0.40 $ 0.80 $ 0.25 $ 0.60 Total fixed expenses are $407,200 per period. Of the total fixed expenses, $20,000 could be avoided if the Velcro product is dropped, $80,000 if the Metal product is dropped, and $60,000 if the Nylon product is dropped. The remaining fixed expenses of $247,200 consist of common fixed expenses such as administrative salaries and rent on the factory building that could be avoided only by going out of business entirely. The company's managers would like…
Portsmouth Company makes upholstered furniture. Its only variable cost is direct materials. The demand for the company's products far exceeds its manufacturing capacity. The bottleneck (or constraint) in the production process is upholstery labor-hours. Information concerning three of Portsmouth's products appears below: Recliner Sofa Love Seat Selling price per unit $ 1,158 $ 1,950 $ 1,400 Variable cost per unit $ 750 $ 1,300 $ 1,000 Upholstery labor-hours per unit 6 hours 13 hours 5 hours Required: Portsmouth is considering paying its upholstery laborers hourly compensation, in addition to their usual salaries, to work overtime. Assuming this extra time would be used to produce sofas, up to how much of an overtime rate per hour should the company be willing to pay to keep the upholstery shop open after normal working hours? A small nearby upholstering company has offered to upholster furniture for Portsmouth at a price of $45 per hour. The management of…
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Pick-Me-Up Company is introducing a new high caffeine coffee in its stores and must decide what price to set for the coffee beans. An estimated demand schedule for the product is as follows: Price 1 Lb. units demanded $4.50 85,600 $6.00 74,500 $7.50 56,000 $9.00 49,100 $10.50 34,800 $12.00 27,100 Estimated costs are as follows: Variable manufacturing costs per unit $1.50 Fixed manufacturing cost per year $38,200 Variable selling & administrative costs per unit $0.50 Fixed selling & administrative costs per year $20,900 Prepare a schedule showing management the total revenue, total cost, and total profit or loss for each selling price.At what price do you recommend Pick-Me-Up Company should choose.
Suppose that Stillwater Designs has two classes of distributors: JIT distributors and non-JIT distributors. The JIT distributor places small, frequent orders, and the non-JIT distributor tends to place larger, less frequent orders. Both types of distributors are buying the same product. Stillwater Designs provides the following information about customer-related activities and costs for the most recent quarter: JITDistributors Non-JITDistributors Sales orders 1,000 100 Sales calls 70 70 Service calls 350 175 Average order size 650 6,500 Manufacturing cost/unit $125 $125 Customer costs: Processing sales orders $3,380,000 Selling goods 1,120,000 Servicing goods 1,050,000 Total $5,550,000 Required: 1. Calculate the total revenues per distributor category, and assign the customer costs to each distributor type by using revenues as the allocation base. Selling price for one unit is $150. Round calculations to the nearest dollar. JIT…
Sheridan's Fish House can produce and sell only one of the following two products: Fried catfish Fried grouper Fryer Hours Required O $12700 O $38100 O $50800 O $63500 3 4 Contribution Margin Per Unit $15 $16 The company has fryer capacity of 12700 hours. How much will the contribution margin be if it produces only the most profitable product?
Bakeryco sells cakes and croissants. Its only constraint is total employee work hours of 300 per week. SFco would like to order 1240 croissants and pay $5.30 each for them. Given the information below, should Bakeryco take SFco’s order? Cakes Croissants Usual Price $32 $6.50 VC $18.50 $1.95 Time required to make 90 minutes 3 minutes Current sales volume 123 per week 2,120 per week
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Milano Pizza is a small neighborhood pizzeria that has a small area for in-store dining as well as offering take-out and free home delivery services. The pizzeria's owner has determined that the shop has two major cost drivers the number of pizzas sold and the number of deliveries made. The pizzeria's cost formulas appear below: Pizza ingredients Fixed Cost Cost per per Month Pizza $ 4.50 $ 5,930 Cost per Delivery Kitchen staff Utilities Delivery person Delivery vehicle Equipment depreciation Rent Miscellaneous $ 620 $640 $ 408 $1,890 $740 $0.40 $ 3.20 $ 0.20 $ 1.60 In November, the pizzeria budgeted for 1,590 pizzas at an average selling price of $16 per pizza and for 230 deliveries. Data concerning the pizzeria's actual results in November appear below. Actual Results Pizzas Deliveries Revenue 1,690 210 Kitchen staff Delivery person $27,600 Pizza ingredients $ 7,390 $ 5,870 Utilities. $ 890 $ 672 $ 988 $ 408 $ 1,890 $ 796 Delivery vehicle Equipment depreciation Rent Miscellaneous…

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