Reference no: EM132864251

Question - The Emerald Street Ice Cream Shop sells ice cream cones. The store's cost structure is as follows: fixed costs per month are $2,000. Variable costs are $1.50 for a single scoop cone and $1.75 for a double scoop cone.

Required -

1. If Emerald Street only sells double scoop cones, and sells them for $4.25 per cone, what is the break-even point in units?

2. If Emerald Street only sells single scoop cones, and charges $3.50 per cone, how many ice cream cones would Emerald Street have to sell to make a profit of $3,000 per month?

3. Assume that Emerald Street wants to sell only double scoop cones, and believes it can sell 8,000 cones per month at $4.25 per cone. What would the variable cost per cone have to be for Emerald Street to make a profit of $8,000 per month?

4. Ignore Part (C) and refer to the original information. If Emerald Street only sells single scoop cones, and sells 5,000 cones per month for $3.60 per cone, what is the contribution margin per unit?