Question

The manager of Calypso, Inc. is considering raising its current
price of $30 per unit by 10%. If she does so, she estimates that
demand will decrease by 20,000 units per month. Calypso currently
sells 51,200 units per month, each of which costs $23 in variable
costs. Fixed costs are $182,000.

**a.** What is the current profit?

**b.** What is the current break-even point in units?
**(Round your an****swer to the nearest whole
number.)**

**c.** If the manager raises the price, what will
profit be? **(Do not r****ound intermediate
calculations.)**

**d.** If the manager raises the price, what will be
the new break-even point in units? **(Do not round
intermediate calculations. Round your answer to the nearest whole
number.)**

**e.** Assume the manager does not know how much
demand will drop if the price increases. By how much would demand
have to drop before the manager would not want to implement the
price increase? **(Do not round intermediate calculations.
Round your answer to the nearest whole number.)**

Answer #1

Cove’s Cakes is a local bakery. Price and cost information
follows:
Price per cake
$
14.11
Variable cost per
cake
Ingredients
2.29
Direct labor
1.06
Overhead (box,
etc.)
0.12
Fixed cost per
month
$
4,894.40
Required:
1. Determine Cove’s 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.)
Break-Even Units
Cakes
Break-Even Sales Dollars
2. Determine the bakery’s margin...

Cove’s Cakes is a local bakery. Price and cost information
follows:
Price per cake
$
13.81
Variable cost per
cake
Ingredients
2.16
Direct labor
1.18
Overhead (box,
etc.)
0.18
Fixed cost per
month
$
3,189.90
Required:
1. Determine Cove’s 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.)
Break Even Units: _____ Cakes
Break Even Sales Dollars:
2....

Cove’s Cakes is a local bakery. Price and cost information
follows:
Price per
cake
$
14.91
Variable cost
per cake
Ingredients
2.33
Direct
labor
1.18
Overhead (box,
etc.)
0.25
Fixed cost per
month
$
3,233.50
Required:
1. Determine Cove’s 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.)
2. Determine the bakery’s margin of safety if it
currently...

Cove’s Cakes is a local bakery. Price and cost information
follows:
Price per cake
$
13.81
Variable cost per cake
Ingredients
2.33
Direct labor
1.19
Overhead (box, etc.)
0.17
Fixed cost per month
$
3,137.20
Required:
1. Determine Cove’s 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.)
2. Determine the bakery’s margin of safety if it
currently...

Cove’s Cakes is a local bakery. Price and cost information
follows:
Price per cake
$
13.01
Variable cost per cake
Ingredients
2.22
Direct labor
1.09
Overhead (box, etc.)
0.20
Fixed cost per month
$
2,945.00
Required:
1. Determine Cove’s 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.)
2. Determine the bakery’s margin of safety if it
currently...

Cove’s Cakes is a local bakery. Price and cost information
follows:
Price per cake
$
14.41
Variable cost per cake
Ingredients
2.28
Direct labor
1.07
Overhead (box, etc.)
0.20
Fixed cost per month
$
4,887.00
Required:
1. Determine Cove’s break-even point in units
and sales dollars.
2. Determine the bakery’s margin of safety if
it currently sells 510 cakes per month.
3. Determine the number of cakes that Cove must
sell to generate $1,500 in profit.
Complete this question
by...

Night Shades Inc. (NSI) manufactures biotech sunglasses. The
variable materials cost is $12.50 per unit, and the variable labor
cost is $7.20 per unit.
a.
What is the variable cost per unit? (Do not round
intermediate calculations and round your answer to 2 decimal
places, e.g., 32.16.)
b.
Suppose the company incurs fixed costs of $840,000 during a
year in which total production is 370,000 units. What are the total
costs for the year? (Do not round intermediate calculations...

The manufacturer of a product that has a variable cost of $2.80
per unit and total fixed cost of $133,000 wants to determine the
level of output necessary to avoid losses.
What level of sales is necessary to break-even if the product
is sold for $4.85? Round your answer to the nearest whole number.
units
What will be the manufacturer’s profit or loss on the sales of
99,000 units? Round your answer to the nearest dollar.
$
If fixed costs...

Sandy Bank, Inc., makes one model of wooden canoe. and, the
information for it follows:
Number of canoes produced and sold
500
700
850
Total costs
Variable costs
$
90,000
$
126,000
$
153,000
Fixed costs
$
119,000
$
119,000
$
119,000
Total costs
$
209,000
$
245,000
$
272,000
Cost per unit
Variable cost per unit
$
180.00
$
180.00
$
180.00
Fixed cost per unit
238.00
170.00
140.00
Total cost per unit
$
418.00
$
350.00
$
320.00...

Juniper
Enterprises sells handmade clocks. Its variable cost per clock is
$23.80, and each clock sells for $34.00. The company’s fixed costs
total $12,580. Suppose that Juniper raises its price by 20 percent,
but costs do not
change.
What is
its new break-even point?
(Round your intermediate calculations to 2 decimal places
and final answer to
the nearest whole number.)

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