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Price Per 2 scoop sundae $5.00 Variable cost per sundae ingredients $1.35 direct labor $0.45 overhead $0.20 Fixed cost per month $9,000 1. Determine Izzys
Price Per 2 scoop sundae | $5.00 |
Variable cost per sundae | |
ingredients | $1.35 |
direct labor | $0.45 |
overhead | $0.20 |
Fixed cost per month | $9,000 |
1. Determine Izzys break-even point in units and sales dollars.
2. Determine how many sundaes must be sold to generate a profit of $18,000.
3. Calculate Izzys new break-even point for each of the following independent scenarios:
a. Sales price decreases by $0.50.
b. Fixed costs decrease by $300 per month.
c. Variable costs increase by $0.50 per sundae.
4. Based on the original information, how many sundaes must Izzy sell to generate a profit of $50,000, if sales price increases by $0.50 and variable costs increase by $0.30?
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