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Corys Cakes is a local bakery. Price and cost information follows: Price per cake $ 17.00 Variable cost per cake Ingredients 2.50 Direct labor 1.40

Corys Cakes is a local bakery. Price and cost information follows:

Price per cake

$

17.00

Variable cost per cake

Ingredients

2.50

Direct labor

1.40

Overhead (box, etc.)

0.20

Fixed cost per month

$

3,850.00

Required:

  1. Determine Corys break-even point in units and sales dollars.
  2. Determine the bakerys margin of safety if it currently sells 450 cakes per month.
  3. Determine the number of cakes that Cory must sell to generate $2,000 in profit.

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