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Breaking even on a product Cindy will produce custom-made birthday cakes with her assistant. She averages out the variable costs to be the following per
Breaking even on a product Cindy will produce custom-made birthday cakes with her assistant. She averages out the variable costs to be the following per cake: 1. Ingredients = $10 2. Decorations = $5 3. Labour = $20 She attributes fixed operating costs of $200 and marketing costs of $1000 per month to this product and thinks she could sell each cake for $50 . a. How many cakes does she need to sell monthly to break even? Round to the nearest whole number. b. If she makes 90 cakes, what is the margin of safety in dollars? Write an email to Cindy explaining your professional opinion on the following: 1. The non-financial benefits and costs that might be associated with the purchase of the special van; and 2. Cindy can source the decorations for the cakes from a supplier overseas for $2.5 per cake. She knows nothing about this supplier except for the price of their decorations. Outline some of the accountability issues and possible implications associated with using this cheaper supplier
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