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.