One Page Paper With Calculations

Assignment 2 Cost-Volume-Profit Analysis You are to write at least a one page paper to Tracy offering her your expertise on her expanding business. You have already helped her determine the cost per cupcake and to organize costs according to whether they are product costs or period costs, and if product costs, which type. Tracy plans to sell 102,000 cupcakes at a price per cupcake of $2.27. Your next task is to create a traditional Income statement and a variable Income statement for Tracy. She would like to know what her breakeven point in units and sales dollars currently are. She would also like to know what amount of sales are required to achieve a target profit of $29,000 and also the units to sell to meet that target profit. Y Write Tracy a one page paper showing the traditional and variable Income statements and describing how you determined the target profit and breakeven point. Raw materials Variable $33,250 All are purchased as needed to avoid spoilage and to have the freshest Ingredients Bakery wages Variable $51,100 They do all of the baking Supervisor's Fixed $29,700 Supervisor does not do any baking, but supervises salary the bakers Office Fixed $20,800 Office personnel do not do any baking personnel Tracy's salary Foced $41,300 She considers herself CEO Salesman's Variable $18,450 He is paid based on number of cupcakes sold to salary special events Supplies Variable $3,310 All used in the bakery Utilities Variable $4,225 85% is for the bakery and 15% is for the (electric) administrative office Utilities (Gas) Variable $2,900 All for bakery for ovens Water Variable $1,650 All for bakery Repairs and Fixed $2,050 All for bakery maintenance Rent expense Fixed $3,090 85% is for the bakery and 15% is for the administrative office Telephone and Fixed $1,225 All for administrative office Intemet