Question
Fresh Bakes offers custom cake services. Each cake takes approximately 5 hours to prepare. The bakery anticipates 800 cakes annually. They have invested $500,000 in
Fresh Bakes offers custom cake services. Each cake takes approximately 5 hours to prepare. The bakery anticipates 800 cakes annually. They have invested $500,000 in their facilities and aim for an ROI of 20%. The budgeted costs for the coming year are shown below:
| Cost Item | Per Cake ($) | Total ($) |
|---|---|---|
| Direct Materials (Ingredients) | 25 | 20,000 |
| Direct Labor (Bakers) | 50 | 40,000 |
| Variable Overhead | 15 | 12,000 |
| Fixed Overhead | - | 100,000 |
| Variable Selling & Admin Expenses | 5 | 4,000 |
| Fixed Selling & Admin Expenses | - | 24,000 |
Required:
- Determine the total cost per cake.
- Calculate the desired ROI per cake.
- Compute the target price per cake.
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Introduction To Health Care Management
Authors: Sharon B. Buchbinder, Nancy H. Shanks
3rd Edition
128408101X, 9781284081015
