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financial statements they need to give to the bank and prepare taxes and payroll but is not a managerial accountant and is not able to

financial statements they need to give to the bank and prepare
taxes and payroll but is not a managerial accountant and is
not able to help. They need to know the cost per cake in
order to be able to calculate their cost of goods sold. A list of
the calculations they would like for you to prepare for them,
as well as, information concerning next period's operations is
below.
Task
Michelle and Vishayla need to know the cost per cake so they
can be sure they are charging enough for each cake. They
also need this to calculate the cost of goods sold. They feel
that direct labor hour is the best cost driver for allocating
manufacturing overhead. They pay their wage employees
$10.00 per hour. Due to the type of production that they have,
they believe job order costing is the best costing system.
Here is the estimated data for 2023 :
They have asked you to determine the following:
Calculate the cost per cake
Create a budgeted Traditional Income Statement and a
Contribution Income Statement
Calculate breakeven point for the company. Calculate their
margin of safety.
They would like to know how much their total sales would
need to be to achieve a target profit of $100,000.
Michelle and Vishayla are thinking of expanding their
operation and purchasing the building next door. The new
building will cost $250,000(their only asset) and they expect
that their sales would increase by 35% and net operating
income to increase by 25%. Calculate their margin, turnover,
and return on assets.
They appreciate your expertise and would like to hear
some of your suggestions on how they can improve their
business. Be creative and show off your business skills!
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