Question

Lucy's bake shop makes cupcakes that cost $.95 each. Lucy knows that 20% of the cupcakes...

Lucy's bake shop makes cupcakes that cost $.95 each. Lucy knows that 20% of the cupcakes will spoil. Assume Lucy wants to 35% markup on cost and produces 60 cupcakes. What should Lucy charge for each cupcake?

Round to the nearest cent.

Homework Answers

Answer #1

Cost of producing 60 cupcakes = 60 cupcakes * $0.95 each cupcake i.e. $57

Desired Markup on Cost = 35% of total cost

= 35% of $57

= $19.95

Desired Sales Revenue = Total Cost of producing 60 cupcakes + Desired Markup

= $57 + $19.95

= $76.95

Number of Cupcakes to be sold = Cup Cakes produced * (1 - Expected Spoilage)

= 60 cupcakes * (1 - 0.20)

= 48 cupcakes

Charges for Each Cupcake = Desired Sales Revenue / Number of Cupcakes to be sold

= $76.95 / 48 cupcakes

= $1.603125 or $1.60 for each cupcake

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
In downtown Boston, a bakery produces 200 bagels a day at a cost of $.20 each....
In downtown Boston, a bakery produces 200 bagels a day at a cost of $.20 each. It is expected the 25% of the bagels will spoil before being sold. Assuming the bakery expects to make 40% markup on its cost, what should the selling price of each bagel be?
A company makes a single product that is sells for $60/unit. It has the capacity to...
A company makes a single product that is sells for $60/unit. It has the capacity to produce 100,000 units per year, but currently produces only 70,000. Per-unit costs associated with the product at an annual production level of 70,000 are below: Variable production cost per unit $10           Fixed production cost per unit $12 Variable selling cost per unit $4 Fixed selling cost per unit $13 A foreign distributor wants to buy 20,100 units for a selling price of $44 each....
Quick Start Company makes 12-volt car batteries. After many years of product testing, the company knows...
Quick Start Company makes 12-volt car batteries. After many years of product testing, the company knows that the average life of a Quick Start battery is normally distributed, with a mean of 45.4 months and a standard deviation of 7.7 months. (a) If Quick Start guarantees a full refund on any battery that fails within the 36-month period after purchase, what percentage of its batteries will the company expect to replace? (Round your answer to two decimal places.) % (b)...
Determine the exact simple interest for a PhP 20,000 loan made in September 23, 2020 to...
Determine the exact simple interest for a PhP 20,000 loan made in September 23, 2020 to be paid off on December 25, 2023 at interest rate of 7% per year. Claire and Phil decided to open a savings account for Luke's college education. They initially deposited PhP 20,000 which earns at interest rate of 8% compounded quarterly. How much can be withdrawn 6 years from now if Luke chooses to split the amount equally into 4 consecutive yearly withdrawals? Ellen...
Sarah’s Organic Soap Company makes organic liquid soap. One of the raw materials for her soaps...
Sarah’s Organic Soap Company makes organic liquid soap. One of the raw materials for her soaps is organic palm oil. She needs 500 kgs of palm oil per day on average. The supplier charges a $55 delivery fee per order (which is independent of the order size) and $5.5 per kg. Sarah’s annual holding cost is 15%. Assume she operates and sells 5 days per week, 52 weeks per year. a.If Sarah wants to minimize her annual ordering and inventory...
Splendid Glasses operates a kiosk at the local? mall, selling sunglasses for $ 20 each.Splendid Glasses...
Splendid Glasses operates a kiosk at the local? mall, selling sunglasses for $ 20 each.Splendid Glasses currently pays ?$1,920 a month to rent the space and pays two? full-time employees to each work 110 hours a month at $8 per hour. The store shares a manager with a neighboring kiosk and pays? 50% of the? manager's annual salary of $ 43,000 and benefits of $8,600. The wholesale cost of the sunglasses to the company is $ 9 a pair. Requirement...
Assume today is December 31, 2016. Barrington Industries expects that its 2017 after-tax operating income [EBIT(1...
Assume today is December 31, 2016. Barrington Industries expects that its 2017 after-tax operating income [EBIT(1 – T)] will be $440 million and its 2017 depreciation expense will be $60 million. Barrington's 2017 gross capital expenditures are expected to be $100 million and the change in its net operating working capital for 2017 will be $20 million. The firm's free cash flow is expected to grow at a constant rate of 5% annually. Assume that its free cash flow occurs...
Quantitative Problem 1: Assume today is December 31, 2016. Barrington Industries expects that its 2017 after-tax...
Quantitative Problem 1: Assume today is December 31, 2016. Barrington Industries expects that its 2017 after-tax operating income [EBIT(1 – T)] will be $450 million and its 2017 depreciation expense will be $60 million. Barrington's 2017 gross capital expenditures are expected to be $100 million and the change in its net operating working capital for 2017 will be $20 million. The firm's free cash flow is expected to grow at a constant rate of 5% annually. Assume that its free...
Make sure you understand the two alternatives. The "make" means that KCSB makes, assembles, and ships...
Make sure you understand the two alternatives. The "make" means that KCSB makes, assembles, and ships all of its bicycles. The "buy" means that KCSB makes, assembles, and ships some of its bicycles, makes some of its bicycles and pays another firm to assemble and ship them, and uses idle resources to make and sell specialty racing bicycles ______________________________________________________ King City Specialty Bikes (KCSB) produces high-end bicycles. Costs to manufacture and market the bicycles at last year's volume level of...
Holmes Manufacturing is considering a new machine that costs $240,000 and would reduce pretax manufacturing costs...
Holmes Manufacturing is considering a new machine that costs $240,000 and would reduce pretax manufacturing costs by $90,000 annually. Holmes would use the 3-year MACRS method to depreciate the machine, and management thinks the machine would have a value of $25,000 at the end of its 5-year operating life. The applicable depreciation rates are 33%, 45%, 15%, and 7%. Net operating working capital would increase by $22,000 initially, but it would be recovered at the end of the project's 5-year...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT