managerial accounting

The Kankakee Bakery produces three types of cakes: birthday, wedding, and special occasion. The cakes are made from scratch and baked in a special cake oven. During the holiday season, the two month period from November 1 through January 1, total demand for the cakes exceeds the capacity of the cake oven. The cake oven is available for baking 690 hours per month, but because of the size of the cakes, it can bake only one cake at a time. Management must determine how to ration the oven time among the three types of cakes. Information on costs, sales prices, and product demand are attached. Monthly fixed costs are $1,200 for fixed manufacturing overhead and $800 for fixed selling and administrative costs. REQUIRED: (1) (2) Calculate the contribution margin per cake for each type of cake. Show appropriate calculations. Calculate the contribution margin per hour of oven time for each cake. Show appropriate calculations. Round your answers for the hours per cake to three decimal places and the contribution margins per hour to three decimal places. Calculate the number of each type of cake that the bakery should produce each month during the holiday season in order to maximize the company's profit. Show appropriate calculations for your answers. Compute the total income before taxes that the company will earn for the period November 1 through January 1 based upon your answers to (3) above. Show appropriate calculations. KANKAKEE BAKERY INFORMATION ON REVENUES, COSTS, AND DEMAND FOR CAKES Birthday Cakes Wedding Cakes Special Occasion Cakes Selling Price 25.00 100.00 $ 40.00 Variable Costs: Direct Materials 5.00 30.00 Direct Labor 5.00 15.00 Variable Manufacturing Overhead 2.00 5.00 4.00 Variable Selling 3.00 12.00 5.00 Required Oven Time Per Cake 10 minutes 80 minutes 18 minutes Monthly Demand During Holiday Season 2,000 500 720