Rosemary is planning to make fancy multi-tiered wedding cakes for the next wed- ding season. To make

Question:

Rosemary is planning to make fancy multi-tiered wedding cakes for the next wed- ding season. To make the cakes, she must invest $834 in some special baking pans and tools. To get started, she needs to spend $1800 to advertise in the newspaper. She estimates that supplies and materials for each cake will cost $60. She is planning to set the price for each cake at $499.
For each of the following, perform a break-even analysis showing computation of the
(a) ;
(b) Contribution rate;
(c) Break-even point in units;
(d) Break-even point in sales dollars.
Contribution Margin
Contribution margin is an important element of cost volume profit analysis that managers carry out to assess the maximum number of units that are required to be at the breakeven point. Contribution margin is the profit before fixed cost and taxes...