Tosk 1 Michelle and Vishaylaneed to know the cost per cake so they can be sure they are charging enough for each cake. They also need this to calculate the cost of goods sold. They feel that direct labor hour is the best cost driver for allocating manufacturing overhead. They pay their wage employees $19.00 per hour. Due to the type of production that they have, they believe job order costing is the best costing system. Here is the estimated data for 2020: Type of cake Expected Annual sales Selling Price per cake Raw Ingredient cost per cake 59000 $100.00 Direct Labor Hour per cake 150 1 tier wedding cake 2 tier wedding cake 3 tier wedding cake Large Wheet cake Medium sheet cake Small sheet cake $375.00 $575.00 $765.00 S25.00 $265.00 $240.00 $125.00 550 $75.00 $65.00 $60.00 Total direct materials Total direct labor Total factory overhead Selling Cost Adminstrative Costs Total Costs $221,250.00 $527,440.00 $62,900.00 $17.500.00 $108,700.00 $937,790,00 Variable verses Fixed Costs Total Variable Costs Total Fixed Costs Total costs $772,790.00 $165,000.00 $937,790.00 Requirements: 1) Calculate the cost per cake 2) Create a budgeted Traditional Income Statement and a Contribution Income Statement 3) Calculate the breakeven point in dollars 4) Calculate a target profit in dollars for a profit of $140,000 fask 2 They believe it will cost them $245,000 to purchase the land near Fort Lee and to build a bakery and storefront. Your task is: 1) Calculate the Return on Investment if the expected increase in Operating income, due to opening the new location near Ft. Lee, is $38,000. 2) Assuming what was stated in 1), calculate the Asset Turnover Rate and Profit Margin if the Expected Sales also increased to $445,000 3) Assuming what is stated in 1) and 2), calculate the Residual income if the required rate of return is 14%. Prepare a 3 page paper that includes your recommendations and calculations. Of those 3 pages, 2 pages should be text and 1 page can be graphs and charts. The paper is a professional presentation to Michelle and Vishavla where you will explain in layman's terms how you calculated cost per unit, breakeven, target profit, ROI, and residual income. As far as the recommendations, explain what you would do to with the company or certain aspects of the company given what you calculate. Your grade will be calculated as follows: Paper Accuracy of calculations Clarity of findings 60% 40% Tosk 1 Michelle and Vishaylaneed to know the cost per cake so they can be sure they are charging enough for each cake. They also need this to calculate the cost of goods sold. They feel that direct labor hour is the best cost driver for allocating manufacturing overhead. They pay their wage employees $19.00 per hour. Due to the type of production that they have, they believe job order costing is the best costing system. Here is the estimated data for 2020: Type of cake Expected Annual sales Selling Price per cake Raw Ingredient cost per cake 59000 $100.00 Direct Labor Hour per cake 150 1 tier wedding cake 2 tier wedding cake 3 tier wedding cake Large Wheet cake Medium sheet cake Small sheet cake $375.00 $575.00 $765.00 S25.00 $265.00 $240.00 $125.00 550 $75.00 $65.00 $60.00 Total direct materials Total direct labor Total factory overhead Selling Cost Adminstrative Costs Total Costs $221,250.00 $527,440.00 $62,900.00 $17.500.00 $108,700.00 $937,790,00 Variable verses Fixed Costs Total Variable Costs Total Fixed Costs Total costs $772,790.00 $165,000.00 $937,790.00 Requirements: 1) Calculate the cost per cake 2) Create a budgeted Traditional Income Statement and a Contribution Income Statement 3) Calculate the breakeven point in dollars 4) Calculate a target profit in dollars for a profit of $140,000 fask 2 They believe it will cost them $245,000 to purchase the land near Fort Lee and to build a bakery and storefront. Your task is: 1) Calculate the Return on Investment if the expected increase in Operating income, due to opening the new location near Ft. Lee, is $38,000. 2) Assuming what was stated in 1), calculate the Asset Turnover Rate and Profit Margin if the Expected Sales also increased to $445,000 3) Assuming what is stated in 1) and 2), calculate the Residual income if the required rate of return is 14%. Prepare a 3 page paper that includes your recommendations and calculations. Of those 3 pages, 2 pages should be text and 1 page can be graphs and charts. The paper is a professional presentation to Michelle and Vishavla where you will explain in layman's terms how you calculated cost per unit, breakeven, target profit, ROI, and residual income. As far as the recommendations, explain what you would do to with the company or certain aspects of the company given what you calculate. Your grade will be calculated as follows: Paper Accuracy of calculations Clarity of findings 60% 40%