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Cove's Cakes is a local bakery. Price and cost information follows: $ 13.41 Price per cake Variable cost per cake Ingredients Direct labor Overhead (box,
Cove's Cakes is a local bakery. Price and cost information follows: $ 13.41 Price per cake Variable cost per cake Ingredients Direct labor Overhead (box, etc.) Fixed cost per month 2.23 1 10 0.22 $2,958.00 Required: 1. Calculate Cove's new break-even point under each of the following independent scenarios: (Round your answer to the nearest whole number.) a. Sales price increases by $1.30 per cake. Break-Even Point 265 cakes b. Fixed costs increase by $540 per month Break-Even Point 354 cakes c. Variable costs decrease by $0.26 per cake. Break-Even Point cakes d. Sales price decreases by $0.20 per cake. Break-Even Point 306 cakes 2. Assume that Cove sold 315 cakes last month. Calculate the company's degree of operating leverage. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Degree of Operating Leverage 3. Using the degree of operating leverage calculated in Requirement 2, calculate the change in profit caused by a 9 percent increase in sales revenue. (Round your final answer to 2 decimal places (ie. .1234 should be entered as 12.34%.)) Effect on Profit %
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