ove's Cakes is a local bakery. Price and cost information follows: Price per cake $ 17.00 Variable cost per cake Ingredients 2.50 Direct labor 1.40 Overhead (box, etc.) 0.20 Fixed costs per month 3,850.00 Required: Calculate Cove's new break-even point under each of the following independent scenarios: Sales price increases by $1.00 per cake. Fixed costs increase by $500 per month. Variable costs decrease by $0.35 per cake. Sales price decreases by $0.50 per cake. Assume that Cove sold 400 cakes last month. Calculate the company's degree of operating leverage. Using the degree of operating leverage, calculate the change in profit caused by a 10 percent increase in sales revenue.

ove's Cakes is a local bakery. Price and cost information follows: Price per cake $ 17.00 Variable cost per cake Ingredients 2.50 Direct labor 1.40 Overhead (box, etc.) 0.20 Fixed costs per month 3,850.00 Required: Calculate Cove's new break-even point under each of the following independent scenarios: Sales price increases by $1.00 per cake. Fixed costs increase by $500 per month. Variable costs decrease by $0.35 per cake. Sales price decreases by $0.50 per cake. Assume that Cove sold 400 cakes last month. Calculate the company's degree of operating leverage. Using the degree of operating leverage, calculate the change in profit caused by a 10 percent increase in sales revenue.

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter7: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 46E: Lotts Company produces and sells one product. The selling price is 10, and the unit variable cost is...

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Lotts Company produces and sells one product. The selling price is 10, and the unit variable cost is 6. Total fixed cost is 10,000. Required: 1. Prepare a CVP graph with Units Sold as the horizontal axis and Dollars as the vertical axis. Label the break-even point on the horizontal axis. 2. Prepare CVP graphs for each of the following independent scenarios: (a) Fixed cost increases by 5,000, (b) Unit variable cost increases to 7, (c) Unit selling price increases to 12, and (d) Fixed cost increases by 5,000 and unit variable cost is 7.
Cove's Cakes is a local bakery. Price and cost information follows: Price per cake Variable cost per cake Ingredients Direct labor Overhead (box, etc.) Fixed costs per month Required: 1. Calculate Cove's new break-even point under each of the following independent scenarios: a. Sales price increases by $1.80 per cake. b. Fixed costs increase by $505 per month. c. Variable costs decrease by $0.37 per cake. $ 13.61 2.27 1.05 0.17 4,351.60 d. Sales price decreases by $0.50 per cake. 2. Assume that Cove sold 450 cakes last month. Calculate the company's degree of operating leverage. 3. Using the degree of operating leverage, calculate the change in profit caused by a 15 percent increase in sales revenue. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Calculate Cove's new break-even point under each of the following independent scenarios: Note: Round your answers to the nearest whole number. 1a Salas nrice increases hy $1 A0 ner raka a.…
Cove's Cakes is a local bakery. Price and cost information follows: Price per cake Variable cost per cake Ingredients Direct labor Overhead (box, etc.) Fixed costs per month Required: 1. Calculate Cove's new break-even point under each of the following independent scenarios: a. Sales price increases by $1.10 per cake. b. Fixed costs increase by $515 per month. c. Variable costs decrease by $0.30 per cake. d. Sales price decreases by $0.50 per cake. 2. Assume that Cove sold 485 cakes last month. Calculate the company's degree of operating leverage. 3. Using the degree of operating leverage, calculate the change in profit caused by a 9 percent increase in sales revenue. Required 1 $ 13.01 2.31 1.07 0.16 4,356.20 Complete this question by entering your answers in the tabs below. Required 2 Required 3 Calculate Cove's new break-even point under each of the following independent scenarios: Note: Round your answers to the nearest whole number. a. Sales price increases by $1.10 per cake. b.…
Cove’s Cakes is a local bakery. Price and cost information follows: Price per cake $ 14.01 Variable cost per cake Ingredients 2.25 Direct labor 1.14 Overhead (box, etc.) 0.20 Fixed costs per month 3,334.40 Required: 1.Calculate Cove’s new break-even point under each of the following independent scenarios: a.Sales price increases by $1.20 per cake. b.Fixed costs increase by $520 per month. c.Variable costs decrease by $0.45 per cake. d.Sales price decreases by $0.50 per cake. 2.Assume that Cove sold 335 cakes last month. Calculate the company’s degree of operating leverage. 3.Using the degree of operating leverage, calculate the change in profit caused by a 5 percent increase in sales revenue
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Cove’s Cakes is a local bakery. Price and cost information follows: Price per cake $14.01 Variable cost per cake Ingredients 2.21 Direct labor 1.11 Overhead (box, etc.) 0.30 Fixed cost per month $4,156.00 Required: 1. Calculate Cove’s new break-even point under each of the following independent scenarios: a. Sales price increases by $1.50 per cake. b. Fixed costs increase by $515 per month. c. Variable costs decrease by $0.39 per cake. d. Sales price decreases by $0.60 per cake. 2. Assume that Cove sold 430 cakes last month. Calculate the company’s degree of operating leverage. 3. Using the degree of operating leverage, calculate the change in profit caused by a 15 percent increase in sales revenue.
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Cove's Cakes is a local bakery. Price and cost information follows: Price per cake Variable cost per cake Ingredients Direct labor $ 13.21 2.25 1.04 Overhead (box, etc.) 0.11 Fixed costs per month 3,335.40 ok Required: ences 1. Calculate Cove's new break-even point under each of the following independent scenarios: a. Sales price increases by $1.60 per cake. b. Fixed costs increase by $465 per month. c. Variable costs decrease by $0.38 per cake. d. Sales price decreases by $0.30 per cake. 2. Assume that Cove sold 355 cakes last month. Calculate the company's degree of operating leverage. 3. Using the degree of operating leverage, calculate the change in profit caused by a 14 percent increase in sales revenue. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Assume that Cove sold 355 cakes last month. Calculate the company's degree of operating leverage. Note: Do not round intermediate calculations. Round your answer to 2 decimal…
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Izzy Ice Cream has the following price and cost information: Price per 2-scoop sundae Variable costs per sundae: Ingredients Direct labor Overhead Fixed costs per month Required: 1. Determine Izzy's break-even point in units and sales dollars. 2. Determine how many sundaes must be sold to generate a profit of $18,000. $5.00 3. Calculate Izzy's new break-even point in units 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? Required 1 Required 2 1.35 0.45 0.20 $ 9,000 Complete this question by entering your answers in the tabs below. Break-even units Break-even sales Required 3 Required 4 Determine Izzy's break-even point in units and sales dollars. sundaes
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