E6-4 (Algo) Analyzing Changes in Price, Cost Structure, Degree of Operating Leverage (LO 6-4, 6-5) Cove's Cakes is a local bakery. Price and cost information follows: $ 13.61 Price per cake Variable cost per cake Ingredients Direct labor Overhead (box, etc.) Fixed cost per month 2.23 1.04 0.12 $3,679.20 Required: 1. Calculate Cove's new break-even point under each of the following independent scenarios: a. Sales price increases by $1.40 per cake. b. Fixed costs increase by $455 per month. c. Variable costs decrease by $0.38 per cake. d. Sales price decreases by $0.50 per cake. 2. Assume that Cove sold 370 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 14 percent increase in sales revenue. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Calolate Candle nou brask, men maintindar ach of the falleine indanandant canviar. Deinde are to the L. vanavie LUSS Uelease wy pu.Jo pei Lake. d. Sales price decreases by $0.50 per cake. 2. Assume that Cove sold 370 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 14 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 $1.40 per cake. b. Fixed costs increase by $455 per month. c. Variable costs decrease by $0.38 per cake. d. Sales price decreases by $0.50 per cake. Show less Break-Even Point cakes cakes 1a. Sales price increases by $1.40 per cake 1b. Fixed costs increase by $455 per month 1c. Variable costs decrease by $0.38 per cake. 1d. Sales price decreases by $0.50 per cake cakes cakes Fixed cost per month $3,679.20 Required: 1. Calculate Cove's new break-even point under each of the following independent scenarios: a. Sales price increases by $1.40 per cake. b. Fixed costs increase by $455 per month. c. Variable costs decrease by $0.38 per cake. d. Sales price decreases by $0.50 per cake. 2. Assume that Cove sold 370 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 14 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 370 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 Required: 1. Calculate Cove's new break-even point under each of the following independent scenarios: a. Sales price increases by $1.40 per cake. b. Fixed costs increase by $455 per month. c. Variable costs decrease by $0.38 per cake. d. Sales price decreases by $0.50 per cake. 2. Assume that Cove sold 370 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 14 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 14 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 %
