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: $ 13.31 Price per cake Variable cont per cake Ingredients Direct labor Overhead (box, etc.) Fixed cost per month 2.31 1.04 0.18 $4,107.60 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 $525 per month. c. Variable costs decrease by $0.40 per cake, d. Sales price decreases by $0.30 per cake. 2. Assume that Cove sold 435 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 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 $525 per month. c. Variable costs decrease by $0.40 per cake, d. Sales price decreases by $0.30 per cake. Show less 1a Sales price increases by $120 per cake 1b. Fixed costs increase by $525 per month to Variable costs decrease by 50.4 per cake 10. Sales price decreases by 50 30 per cake Break Even Point cakes cakes cakes cakes Required 2 > Saved 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: $ 13.31 Price per cake Variable cont per cake Ingredients Direct labor Overhead (box, etc.) Fixed cost per month 2.32 1.04 0.18 $4,107.60 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 $525 per month c. Variable costs decrease by $0.40 per cake. d. Sales price decreases by $0.30 per cake. 2. Assume that Cove sold 435 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 435 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 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: 13.31 Price per cake Variable cont per cake Ingredients Direct labor Overhead (box, etc.) Pixed cost per month 2.31 1.04 0.18 $4,107.60 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 $525 per month. c. Variable costs decrease by $0.40 per cake. d. Sales price decreases by $0.30 per cake, 2. Assume that Cove sold 435 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. (.e. 0.1234 should be entered as 12.34%.)) Efect on Profit
