AMBA630 Week 8 Homework Assignment Solution
Question 1
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The Sarah Cupcake Co. has fixed costs of $50,000 per year. It sells cupcakes in boxes of 6 for $7.50 each. Variable costs per unit are $3. This includes raw materials, packaging and costs of labor and electricity for the ovens.
Answer: 1-A What is the contribution margin of the product?
Answer: 1-B Calculate breakeven point and unit sales in dollars
Answer: 1-C What is the operating profit (loss) at 5,000 unit per year?
Answer: 1-D What is the operating profit(loss) at 15,000 unit per year?
Answer:1-E Plot a breakeven chart, use the foregoing figures and other data as necessary.You should get a straight lines.
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