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

Price per cake	$ 14.21
Variable cost per cake
Ingredients	2.24
Direct labor	1.12
Overhead (box, etc.)	0.19
Fixed costs per month	4,157.40

Required:

Determine Coves break-even point in units and sales dollars.

Determine the bakerys margin of safety in sales dollars if it currently sells 470 cakes per month.

Determine the number of cakes that Cove must sell to generate $2,700 in profit.

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

Price per cake	$ 13.81
Variable cost per cake
Ingredients	2.29
Direct labor	1.17
Overhead (box, etc.)	0.30
Fixed costs per month	4,321.50

Required:

Calculate Coves new break-even point under each of the following independent scenarios:

Sales price increases by $1.40 per cake.

Fixed costs increase by $545 per month.

Variable costs decrease by $0.38 per cake.

Sales price decreases by $0.60 per cake.

Assume that Cove sold 440 cakes last month. Calculate the companys degree of operating leverage.

Using the degree of operating leverage, calculate the change in profit caused by a 6 percent increase in sales revenue.

~Last month, Laredo Company sold 510 units for $55 each. During the month, fixed costs were $5,478 and variable costs were $22 per unit.

Required:

Determine the unit contribution margin and contribution margin ratio.

Calculate the break-even point in units and sales dollars.

Compute Laredos margin of safety in units and as a percentage of sales.

~Tiago makes three models of camera lens. Its product mix and contribution margin per unit follow:

	Percentage of Unit Sales	Contribution Margin per Unit
Lens A	29%	$ 30
Lens B	44	22
Lens C	27	35

Required:

Determine the weighted-average contribution margin per unit.

Determine the number of units of each product that Tiago must sell to break even if fixed costs are $189,000.

Determine how many units of each product must be sold to generate a profit of $66,000.