Business, 20.01.2020 21:31 averagegirl27

Gobblecakes is a bakery that specializes in cupcakes. the annual fixed cost to make cupcakes is $18,000. the variable cost including ingredients and labor to make a cupcake is $0.90. the bakery sells cupcakes for $3.20 apiece.

a. if the bakery sells 12,000 cupcakes annually, determine the total cost, total revenue, and profit.
b. how many cupcakes will the bakery need to sell in order to break even?

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Answer from: 0436500

a) If the bakery sells 12,000 cupcakes annually;

i) The total cost will be $28,800.

ii) The total revenue will be $38,400.

iii)The total profit will be $9,600.

b) In order to break even, the bakery need to sell 7,826 cupcakes.

Explanation:

i)The total cost computation.

The total cost refers to the total expenses incurred by a business/firm/company to produce a particular volume of its products. Alternatively, total cost refers to the total expenses incurred by a business/firm/company to provide a particular volume service.

Total costs comprises of two cost elements,the fixed costs and the variable costs.Thus total costs incurred by the bakery can be computed using the following formula:

Total costs = total fixed cost + ( Average variable cost per unit × Number of units produced).

Total costs = 18,000 + ( 0.9 × 12,000).

Total annual costs = 18,000 + 10,800 = $28,800.

ii) Total revenue computation.

Total revenue refers to amount attributed to the total sales of a business's products/services.

Total revenue realized by the bakery can be computed using the following formula:

Total revenue = Unit price × Number of units sold

Total revenue = 3.20 × 12,000

Total revenue = $38.400.

iii) Profit computation.

Total profit realized by the bakery can be computed using the following formula:

Profit = Total revenue - Total cost of production

Profit = 38,400 - 28,800 = $9,600

b) Number of cupcake sales required to achieve to break even.

Break-even point refers to the point at which all the revenue generated by a business covers/equals all its expenditure or costs.

The number of cupcakes sales required by the bakery to achieve break- even point can be computed using the following formula:

Break even point in units = fixed costs ÷ ( Unit price - Variable costs)

Break even point in units = 18,000 ÷ ( 3.20 - 0.90)

Break even point in units = 7,826 cupcakes.

Answer from: Quest

you don't if you paid you paid. it's like if i bought a computer and used it then i say idon't want it anymore so im gonna return it. you can't. unlkess you have your reciept

Answer from: Quest

answer; /// the above statement is (true); good luck

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Gobblecakes is a bakery that specializes in cupcakes. the annual fixed cost to make cupcakes is $18,...