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Problem - Cove's Cakes is a local bakery. Price and cost information follows:
Price per cake $14.71
Variable cost per cake
Ingredients 2.24
Direct labor 1.04
Overhead (box, etc) 0.11
Fixed cost per month $3,509.20
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 400 cakes per month
3. Determine the number of cakes that Cove must sell to generate $2,300 in profit.
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