Cove's Cakes is a local bakery. Price and cost information follows:

Price per cake

Variable cost per cake

Ingredients

Direct labor

Overhead $($box$,$ etc.$)$

Fixed costs per month

Required:

Calculate Cove's new break$-$even point under each of the following independent scenarios:

a$.$ Sales price increases by $$1\mathrm{.}90$ per cake.

b$.$ Fixed costs increase by $$485$ per month.

c$.$ Variable costs decrease by $$0\mathrm{.}38$ per cake.

d$.$ Sales price decreases by $$0\mathrm{.}70$ per cake.

Assume that Cove sold $475$ cakes last month. Calculate the company's degree of operating leverage.

Using the degree of operating leverage, calculate the change in profit caused by a $12$ percent increase in sales revenue.

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