Coves Cakes is a local bakery. Price and cost information follows: Price per cake $ 13.81 Variable cost per cake Ingredients 2.26 Direct labor 1.12 Overhead (box, etc.) 0.27 Fixed cost per month $ 4,673.60 Required: 1. Calculate Coves new break-even point under each of the following independent scenarios: a. Sales price increases by $1.20 per cake. b. Fixed costs increase by $535 per month. c. Variable costs decrease by $0.41 per cake. d. Sales price decreases by $0.30 per cake. 2. Assume that Cove sold 470 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 9 percent increase in sales revenue.
Cove's Cakes is a local bakery. Price and cost information follows: $ 13.81 Price per cake Variable cost per cake Ingredients Direct labor Overhead (box, etc.) Fixed cost per month 2.26 1.12 0.27 $4,673.60 Required: 1. Calculate Cove's new break-even point under each of the following independent scenarios: a. Sales price increases by $1.20 per cake. b. Fixed costs increase by $535 per month. c. Variable costs decrease by $0.41 per cake. d. Sales price decreases by $0.30 per cake. 2. Assume that Cove sold 470 cakes last month. Calculate the company's degree of operating leverage. 3. Using the degree of operating leverage, calculate the change in profit caused by a 9 percent increase in sales revenue. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Calculate Cove's new break-even point under each of the following independent scenarios: (Round your answers to the nearest whole number.) a. Sales price increases by $1.20 per cake. b. Fixed costs increase by $535 per month. c. Variable costs decrease by $0.41 per cake. d. Sales price decreases by $0.30 per cake. Show less 12. Sales price increases by $1.20 per cake 1b. Fixed costs increase by $535 per month 1c. Variable costs decrease by $0.41 per cake. 1d. Sales price decreases by $0.30 per cake Break-Even Point cakes cakes cakes cakes Cove's Cakes is a local bakery. Price and cost information follows: $ 13.81 Price per cake Variable cost per cake Ingredients Direct labor Overhead (box, etc.) Fixed cost per month 2.26 1.12 0.27 $4,673.60 Required: 1. Calculate Cove's new break-even point under each of the following independent scenarios: a. Sales price increases by $1.20 per cake. b. Fixed costs increase by $535 per month. c. Variable costs decrease by $0.41 per cake. d. Sales price decreases by $0.30 per cake. 2. Assume that Cove sold 470 cakes last month. Calculate the company's degree of operating leverage. 3. Using the degree of operating leverage, calculate the change in profit caused by a 9 percent increase in sales revenue. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Assume that Cove sold 470 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 Cove's Cakes is a local bakery. Price and cost information follows: 13.81 Price per cake Variable cost per cake Ingredients Direct labor Overhead (box, etc.) Fixed cost per month 2.26 1.12 0.27 $4,673.60 Required: 1. Calculate Cove's new break-even point under each of the following independent scenarios: a. Sales price increases by $1.20 per cake. b. Fixed costs increase by $535 per month. c. Variable costs decrease by $0.41 per cake. d. Sales price decreases by $0.30 per cake. 2. Assume that Cove sold 470 cakes last month. Calculate the company's degree of operating leverage. 3. Using the degree of operating leverage, calculate the change in profit caused by a 9 percent increase in sales revenue. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Using the degree of operating leverage, calculate the change in profit caused by a 9 percent increase in sales revenue. (Round your intermediate values to 2 decimal places. (i.e. 0.1234 should be entered as 12.34%.)) Effect on Profit %
