2C1I SPECIALTY CAKES INC. PRODUCES TWO TYPES OF CAKES, A 2 LBS. ROUND...

214.

CSO: 2C1c

LOS: 2C1i

Specialty Cakes Inc. produces two types of cakes, a 2 lbs. round cake and a 3 lbs. heart-

shaped cake. Total fixed costs for the firm are $94,000. Variable costs and sales data for

the two types of cakes are presented below.

2 lbs.

3 lbs.

Round Cake

Heart-shape Cake

Selling price per unit

$12

$20

Variable cost per unit

$8

$15

Current sales (units)

10,000

15,000

If the product sales mix were to change to three heart-shaped cakes for each round cake,

the breakeven volume for each of these products would be

a.

8,174 round cakes, 12,261 heart-shaped cakes.

b.

12,261 round cakes, 8,174 heart-shaped cakes.

c.

4,947 round cakes, 14,842 heart-shaped cakes.

d.

15,326 round cakes, 8,109 heart-shaped cakes.