Question
Piantedosi Bakery makes several varieties of bread and rolls. One type of baked bread is Scali Bread. Piantedosi currently sells this bread for $3.99 per
Piantedosi Bakery makes several varieties of bread and rolls. One type of baked bread is Scali Bread. Piantedosi currently sells this bread for $3.99 per loaf. The estimated breakdown of cost associated with producing this variety is as follows: Direct Material.......$.75 Direct Labor...........$1.55 Variable Manufacturing Overhead...$. 45 Piantedosis is considering adding a new machine that will add more fixed costs to the production of the bread. The total fixed cost that is specifically identified as being used in the production of the Scali bread (both existing and the new equipment) is $450,000. Required: 1) How many loaves of Scali Bread must Piantedosi sell to make a profit of $200,000 each year? 2) What would the total amount of sales be to support the number of loaves being sold?
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