Question

Sweet Bakery sells pastries and cupcakes. Usually, for every three pastries they sell one cupcake (which...

Sweet Bakery sells pastries and cupcakes. Usually, for every three pastries they sell one cupcake (which means, pastries : cupcake = 3:1). Each pastry has an BDT80 contribution margin, and each cupcake has a BDT60 contribution margin. Sweet Bakery’s fixed costs are BDT180,000 per month. The selling prices of pastries and cupcakes, respectively, are BDT300 and BDT150. The business is subjected to a 40 percent income tax rate.

a. How much revenue is needed to break even? How many pastries and cupcakes does this represent?

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Formula for Breakeven Point = Fixed Cost÷Contribution per unit

As mentioned in the question the total fixed cost per month is BDT 180,000. The ratio of Pastries to Cupcakes is 3:1.

Therefore, the fixed Cost attributable to

Pastries is BDT180,000*3÷4

=BDT135,000

Cupcakes is BDT180,000-BDT135000

=BDT45,000

Contribution margin for Pastries - BDT80

Contribution margin for cupcakes -BDT60

Therefore, the Breakeven units is

Pastries = BDT135,000÷80 = 1687.5 or 1688

Cupcakes = BDT45,000÷60=750

Revenue required to Breakeven = BDT618,750 (1687.5*300+750*150)

The revenue represents 1687.5 or 1688 for Pastries and 750 cupcakes.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Business Description Daisy, a friend who is an excellent baker, has decided to open a cupcake...
Business Description Daisy, a friend who is an excellent baker, has decided to open a cupcake store to sell gourmet cupcakes. Daisy has asked you if you will be willing to loan the company $50,000 at an interest rate of 4% that will be paid back over 5 years. Using the skills you have developed in ACCT 551 Accounting for Managers, you will analyze the business to determine if you will loan Daisy the money. The business is scheduled to...
The Salsa Shack sells three tacos for every two burritos. A taco sells for $2.00 and...
The Salsa Shack sells three tacos for every two burritos. A taco sells for $2.00 and has a variable cost of $1.00. A burrito sells for $5 and has a variable cost of $2.25. The Salsa Shack has fixed costs of $27,200. A. What is the weighted-average contribution margin? B. How many of each product does The Salsa Shack need to sell in order to breakeven (ie - how many tacos and how many burritos must be sold to breakeven)
Toler Company sells flags with team logos. Toler has fixed costs of $ 1,680,000 per year...
Toler Company sells flags with team logos. Toler has fixed costs of $ 1,680,000 per year plus variable costs of $ 7.20 per flag. Each flag sells for $ 24.00. Requirement 1. Use the equation approach to compute the number of flags Toler must sell each year to break even. ​First, select the formula to compute the required sales in units to break even. Net sales revenue - Variable costs - Fixed costs = Target profit Rearrange the formula you...
Hawk Homes, Inc., makes one type of birdhouse that it sells for $31.70 each. Its variable...
Hawk Homes, Inc., makes one type of birdhouse that it sells for $31.70 each. Its variable cost is $15.00 per house, and its fixed costs total $14,428.80 per year. Hawk currently has the capacity to produce up to 2,500 birdhouses per year, so its relevant range is 0 to 2,500 houses. Required: 1. Prepare a contribution margin income statement for Hawk assuming it sells 1,150 birdhouses this year. (Enter your answers rounded to 2 decimal places.) 2. Without any calculations,...
Hawk Homes, Inc., makes one type of birdhouse that it sells for $29.90 each. Its variable...
Hawk Homes, Inc., makes one type of birdhouse that it sells for $29.90 each. Its variable cost is $13.60 per house, and its fixed costs total $14,034.30 per year. Hawk currently has the capacity to produce up to 2,700 birdhouses per year, so its relevant range is 0 to 2,700 houses. Required: 1. Prepare a contribution margin income statement for Hawk assuming it sells 1,190 birdhouses this year. (Enter your answers rounded to 2 decimal places.) 2. Without any calculations,...
Break-Even with Multiple Products We Scream For Ice Cream sells ice cream in three flavors: Chocolate,...
Break-Even with Multiple Products We Scream For Ice Cream sells ice cream in three flavors: Chocolate, Strawberry, and Vanilla. It sold 28,000 gallons last year, but it is still losing money. For every five gallons of ice cream sold, one gallon is Strawberry and the remainder is split evenly between Chocolate and Vanilla. Fixed costs for We Scream For Ice Cream are $55,056 and additional information follows: Chocolate Vanilla Strawberry Sales price per gallon $5.25 $5.25 $5.25 Variable cost per...
A firm sells two products, Regular and Ultra. For every unit of Regular sold, two units...
A firm sells two products, Regular and Ultra. For every unit of Regular sold, two units of Ultra are sold. The firm's total fixed costs are $1,876,000. Selling prices and cost information for both products follow. What is the firm's break-even point in units of Regular and Ultra? Product Unit Sales Price Variable Cost Per Unit Regular $ 25 $ 11 Ultra 28 7 Multiple Choice 33,500 Regular units and 33,500 Ultra units. 39,083 Regular units and 78,167 Ultra units....
Mastery Problem: CVP and the Contribution Margin Income Statement For planning and control purposes, managers have...
Mastery Problem: CVP and the Contribution Margin Income Statement For planning and control purposes, managers have a powerful tool known as cost-volume-profit (CVP) analysis. CVP shows how revenues, expenses, and profits behave as volume changes. In CVP analysis, costs are classified according to behavior: variable or fixed. Costs are classified by behavior on the income statement in CVP analysis to arrive at operating income. This format is known as the contribution margin income statement. Complete the following table to illustrate...
Please answer every question in detail PRACTICE QUESTION Perlin Promotions Limited manufactures promotional items. One of...
Please answer every question in detail PRACTICE QUESTION Perlin Promotions Limited manufactures promotional items. One of the company’s most popular products is a multi-coloured pen (called the “Stripey”) that is imprinted with the name and advertising slogan of each of its customer firms. In September, the company sold 50,000 Stripey pens with the following operating results: Sales (50,000 pens) $40,000 Variable expenses 22,000 Contribution margin $18,000 Fixed expenses 15,000 Income before tax $ 3,000 The company is subject to a...
Total utility can be objectively measured in numbers that indicate usefulness or benefit to the consumer....
Total utility can be objectively measured in numbers that indicate usefulness or benefit to the consumer. ____ 2. Consumers should purchase quantities of a good to the point where MU > P. ____ 3. Voluntary exchange requires that there must be mutual gain. ____ 4. Points along a budget line represent the maximum combinations of two commodities that a consumer can afford. ____ 5. The budget line represents a consumer's preferences for a commodity. ____ 6. A change in consumer...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT