Answer Happy

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 cost per month Break-Even Point $ Required: 1. Calculate Cove's new break-even point under each of the following independent scenarios: (Round your answer to the nearest whole number.) a. Sales price increases by $1.20 per cake. Break-Even Point 14.71 2.23 1.08 0.25 $3,345.00 cakes b. Fixed costs increase by $500 per month. cakes

c. Variable costs decrease by $0.33 per cake. Break-Even Point d. Sales price decreases by $0.70 per cake. Break-Even Point cakes Degree of Operating Leverage 2. Assume that Cove sold 320 cakes last month. Calculate the company's degree of operating leverage. (Do not round intermediate calculations. Round your answer to 2 decimal places.) cakes Effect on Profit 3. Using the degree of operating leverage calculated in Requirement 2, calculate the change in profit caused by a 12 percent increase in sales revenue. (Round your final answer to 2 decimal places (i.e. .1234 should be entered as 12.34%.)) %