Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Question No. [2) Ali's Shop sells only coffee and cake. Ali estimates that every time he sells one cake, he sells four cups of coffee.

image text in transcribed
Question No. [2) Ali's Shop sells only coffee and cake. Ali estimates that every time he sells one cake, he sells four cups of coffee. The budgeted cost information for Ali's products for 2022 follows: Coffee Cake Selling price $2.50 $3.75 Product ingredients $0.25 $0.50 Hourly sales staff (cost per unit) $0.50 $1.00 Packaging $0.50 $0.25 Fixed Costs Rent on store and equipment $10,000 Marketing and advertising cost $4,000 Reguired: 1. How many cups of coffee and how many cakes must Ali sell in order to break even? 2. If the sales mix is four cups of coffee to one cake, how many units of each product does Ali need to sell to earn operating income of $28,000? 3. Assume that Ali decides to add the sale of hot chocolates to his product mix. The selling price for chocolates is $3.00 and the related variable costs are $0.75. assuming a sales mix of three cups of coffee to two cakes to one chocolate, how many units of each product does Ali need to sell in order to break even

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Accounting Plus

Authors: Robert Libby, Patricia Libby, Daniel Short

8th Edition

1259116832, 9781259116834

More Books

Students also viewed these Accounting questions