Managerial Accounting
3rd Edition
ISBN: 9780077826482
Author: Stacey M Whitecotton Associate Professor, Robert Libby, Fred Phillips Associate Professor
Publisher: McGraw-Hill Education
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Textbook Question
Chapter 6, Problem 3E
Determining Break-Even Point, target Profit. Margin of Safety
Cove’s Cakes is a local bakery. Price and cost information follows
1. Determine Cove’s breakeven point in units and sales dos.
2. Determine the bakery’s margin of safety if currently sells 450 cakes per month.
3. Determine the number of cakes that Cove must sell to generate $2,000 in profit.
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Students have asked these similar questions
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. Determine Cove's break-even point in units and sales dollars.
2. Determine the bakery's margin of safety in sales dollars if it currently sells 360 cakes per month.
3. Determine the number of cakes that Cove must sell to generate $1,900 in profit.
Required 1 Required 2
$13.81
Complete this question by entering your answers in the tabs below.
2.28
1.07
0.14
3,302.40
Required 3
Break-Even Units
Break-Even Sales Dollars
Determine Cove's break-even point in units and sales dollars.
Note: Round your Break-Even Units answer to the nearest whole number. Round your other intermediate cal
sales dollars answer to 2 decimal places.
Cakes
Analyzing profitability
Father Furniture Company manufactures and sells oak tables and chairs. Price and cost data for the furniture follow:
Father Furniture has three sales representatives: Adam, Ben, and Caleb. Adam sold 100 tables With 6 chairs each. Ben sold 110 tables With 4 chairs each. Caleb sold 80 tables with 8 chairs each.
Requirements
Calculate the total contribution margin and the contribution margin ratio for each sales representative (round to two decimal places).
Which sales representative has the highest contribution margin ratio? Explain Why
Analyzing profitability
Relative Furniture Company manufactures and sells oak tables and chairs. Price and cost data for the furniture follow:
Relative Furniture has three sales representatives: Abe, Brett, and Corrin. Abe sold 50 tables With 4 Chairs each. Brett sold 110 tables With 6 chairs each. Corrin sold 90 tables with 8 chairs each.
Requirements
Calculate the total contribution margin and the contribution margin ratio for each sales representative (round to two decimal places).
Which sales representative has the highest contribution margin ratio? Explain why.
Chapter 6 Solutions
Managerial Accounting
Ch. 6 - Identify and briefly describe the assumptions of...Ch. 6 - Why should managers create a CVT graph?Ch. 6 - When considering a CVP graph, how is the...Ch. 6 - Your supervisor has requested that you prepare a...Ch. 6 - Why is it important for a company to know its...Ch. 6 - Explain the difference between unit contribution...Ch. 6 - A Company’s Cost structure can have a high...Ch. 6 - Prob. 8QCh. 6 - Prob. 9QCh. 6 - Bert Company and Ernie Company are competitors in...
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