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

Price per cake$ 13.51Variable cost per cake Ingredients2.20Direct labor1.16Overhead (box, etc.)0.15Fixed costs per month3,200.00

Required:

1. Calculate Coves new break-even point under each of the following independent scenarios:
   1. Sales price increases by $1.60 per cake.
   2. Fixed costs increase by $530 per month.
   3. Variable costs decrease by $0.32 per cake.
   4. Sales price decreases by $0.50 per cake.
2. Assume that Cove sold 340 cakes last month. Calculate the companys degree of operating leverage.
3. Using the degree of operating leverage, calculate the change in profit caused by a 12 percent increase in sales revenue.