Please show work and explain answer for both questions one and two. Thank You

eakeven with More Than One Product that Red Jett Sweets, on average, sells one beverage for each three cupcakes sold. In this situa- Sk 13 tion, an average (typical) sale would be 3 cupcakes x $2.75 plus 1 beverage x $1.35, for a total sale of $9.60. f the variable cost of one cupcake is $1.34, and the variable cost of one beverage is $0.52, how many cupcakes and beverages must be sold to attain breakeven? would you calculate breakeven for a restaurant that sells 50 different items, each with different price and different variable cost? 2. How Key points Fixed costs plus variable costs equal your total cost. . Fixed costs remain constant in total, but variable costs increase as output increases and de- crease if output decreases. The more cupcakes that Red Jett Sweets sell, the less its fixed cost per item becomes. In our example, at one cupcake, the entire fixed cost of $6,260 is applied to that one item. At 1,000 You have certainly encountered these concepts before. The point at which gross revenue exactly any. In the example above, Red Jett Sweets must sell 4,440 cupcakes to break even. These relation- this reason, the concept has been expanded into cost-volume-profit analysis (CVP). Red Jett Sweets How many cupcakes must Red Jett Sweets sell to make a $100,000 profit? There cupcakes, the fixed cost per item is only $6.26. This truism is called economy of scale. e equals total costs is called the break-even point. At breakeven you neither make any money nor lose w ships are shown graphically in Figure 13.11. Of course, no one goes into business to break even. Forb has determined that the best price for their cupcakes is $2.75. Suppose management would like to earn Tt must be enough sales to cover all Red Jett Sweets' costs, then to produce $100,000 in profit Total Revenue Quantity X $2.75 Total Variable Cost Quantity x $1.344 + Total Annual Fixed Cost 6,260 12 Desired Profit + $100,000 If you solve this equation as in Figure 13.10, you will find that Red Jett Sweets must sell 75.362 cup- cakes to earn an annual profit of $100,000. These relationships are shown graphically in Figure 13.11. This formula can easily be expanded to account for income taxes. If Red Jett Sweets's management wants to have $100,000 after tax, and the firm's tax rate is 25 percent, then the formula would become: Calculate Sales to Make $100,000 AFTER Taxes Total Annual Fixed Cost Desired Profit Total Revenue Quantity X $2.75 Quantity X $1.344 + Total Variable Cost 6,260 X 12 $100,000/(1- 25) Revenue $207,246 Profit $100,000 Total Revenue