E6-3 Determining Break-Even Point, Target Profit, Margin of Safety [LO 6-1, 6-2, 6-3] Coves Cakes...
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Accounting
E6-3 Determining Break-Even Point, Target Profit, Margin of Safety [LO 6-1, 6-2, 6-3]
Coves Cakes is a local bakery. Price and cost information follows:
| Price per cake | $ | 13.31 | |
| Variable cost per cake | |||
| Ingredients | 2.18 | ||
| Direct labor | 1.01 | ||
| Overhead (box, etc.) | 0.22 | ||
| Fixed cost per month | $ | 3,465.00 | |
1. Determine Coves break-even point in units and sales dollars. (Round your Break-Even Units answer to the nearest whole number. Round your other intermediate calculations and sales dollars answer to 2 decimal places.)
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2. Determine the bakerys margin of safety if it currently sells 400 cakes per month. (Round your intermediate calculations to 2 decimals. Round the break-even units and final answer to nearest whole dollar.)
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3. Determine the number of cakes that Cove must sell to generate $1,600 in profit. (Round your intermediate calculations to 2 decimal places and final answer to nearest whole number.)
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