1. Consider Mollys Cupcakes (Cupcake War Champion) in downtown Manhattan, New York City. Variable costs for 1 dozen specialty cupcakes is $14 dollars. A dozen cupcakes sells for $24 dollars. Her rent for the bakery and front retail shop is $6,000 per month.

1. What is the contribution per dozen cupcakes? What is the contribution margin?

2. If Mollys Cupcakes sells an average of 50 dozen cupcakes today, what is her total contribution for an average day?

3. What is the break-even volume? What is the break-even revenue?

4. Molly is considering moving to a new bakery with a new rent of $3,200 but increased cost of making the cupcakes of $16 per dozen. Assume Molly can continue to sell cupcakes at 50 dozen per day (at least), 20 days a month (1000 dozen cupcakes a month).

1. Based on the speed (#work days needed) of breaking even, should Molly move? (Hint: Calculate how many days it took her to breakeven at her current location compared to this new location)

2. What is her monthly profit at her current location compared to this new proposed location? Molly knows she can at least sell 1000 dozen cupcakes a month with no risk at either location.

3. Considering monthly profit and breakeven point together, should Molly move? Why or why not? Justify your choice.