E6-4 Analyzing Changes in Price, Cost Structure, Degree of Operating Leverage [LO 6-4, 6-5] Coves Cakes is a local bakery. Price and cost information follows: Price per cake $ 14.11 Variable cost per cake Ingredients 2.29 Direct labor 1.16 Overhead (box, etc.) 0.11 Fixed cost per month $ 3,376.00 Required:

1. Calculate Coves new break-even point under each of the following independent scenarios: (Round your answer to the nearest whole number.)

a. Sales price increases by $2.00 per cake.

b. Fixed costs increase by $475 per month.

c. Variable costs decrease by $0.29 per cake.

d. Sales price decreases by $0.60 per cake.

2. Assume that Cove sold 330 cakes last month. Calculate the companys degree of operating leverage. (Do not round intermediate calculations. Round your answer to 2 decimal places.)

3. Using the degree of operating leverage calculated in Requirement 2, calculate the change in profit caused by a 14 percent increase in sales revenue. (Round your final answer to 2 decimal places (i.e. .1234 should be entered as 12.34%.))