Cathy's Cake Shop creates custom cakes to the residents of Ottawa, Canada. Cathy, the owner of...

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Cathy's Cake Shop creates custom cakes to the residents of Ottawa, Canada. Cathy, the owner of the business, wants to better understand some of the costs of her business, and has provided the below income statement for the year: Sales (4000 cakes) Variable costs to produce Contribution Margin Rent and Utilities for the shop Operating Income Income Tax Expense (10%) Net Income Required Cathy wants to know the following about her business: A) What is her break-even point in cakes (units) sold? B) What is the Cake Shop's Margin of Safey in dollars? 175,000 125,000 50,000 25,000 25,000 2500 22,500 C) Cathywants to run a special promotion to sell a new specialty red velvet cake she plans to sell. She wants to discount all cakes sold by 8%. Variable costs would increase by $3.5 per unit, but sales would increase by 18%. The advertising for this would cost $8000. Should Cathy run this promotion? Use incremental analysis to determine the incremental income/loss. Cathy's Cake Shop creates custom cakes to the residents of Ottawa, Canada. Cathy, the owner of the business, wants to better understand some of the costs of her business, and has provided the below income statement for the year: Sales (4000 cakes) Variable costs to produce Contribution Margin Rent and Utilities for the shop Operating Income Income Tax Expense (10%) Net Income Required Cathy wants to know the following about her business: A) What is her break-even point in cakes (units) sold? B) What is the Cake Shop's Margin of Safey in dollars? 175,000 125,000 50,000 25,000 25,000 2500 22,500 C) Cathywants to run a special promotion to sell a new specialty red velvet cake she plans to sell. She wants to discount all cakes sold by 8%. Variable costs would increase by $3.5 per unit, but sales would increase by 18%. The advertising for this would cost $8000. Should Cathy run this promotion? Use incremental analysis to determine the incremental income/loss.