financial statements they need to give to the bank and prepare

taxes and payroll but is not a managerial accountant and is

not able to help. They need to know the cost per cake in

order to be able to calculate their cost of goods sold. A list of

the calculations they would like for you to prepare for them,

as well as$,$ information concerning next period's operations is

below.

Task

Michelle and Vishayla need 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

$$10\mathrm{.}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 $2023$ :

They have asked you to determine the following:

Calculate the cost per cake

Create a budgeted Traditional Income Statement and a

Contribution Income Statement

Calculate breakeven point for the company. Calculate their

margin of safety.

They would like to know how much their total sales would

need to be to achieve a target profit of $$100,000.$

Michelle and Vishayla are thinking of expanding their

operation and purchasing the building next door. The new

building will cost $$250,000($their only asset$)$ and they expect

that their sales would increase by $35\%$ and net operating

income to increase by $25\%.$ Calculate their margin, turnover,

and return on assets.

They appreciate your expertise and would like to hear

some of your suggestions on how they can improve their

business. Be creative and show off your business skills!