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Jenny will produce custom made birthday cakes with her assistant. She averages out the variable costs to be the following per cake: 1. Ingredients =

Jenny will produce custom made birthday cakes with her assistant. She averages out the variable costs to be the following per cake: 1. Ingredients = $7 2. Decorations = $10 3. Labour = $15 She attributes fixed costs of $150 per month to this product and thinks she could sell each cake for $60 dollars.

Required a. How many cakes does she need to sell per month to break even? Round to the nearest whole number. b. If she makes 50 cakes what is the margin of safety in dollars?

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