E6-4 Analyzing Changes in Price, Cost Structure, Degree of Operating Leverage [LO 6-4, 6-5] Cove's...
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E6-4 Analyzing Changes in Price, Cost Structure, Degree of Operating Leverage [LO 6-4, 6-5] Cove's Cakes is a local bakery. Price and cost information follows: $ 13.51 Price per cake Variable cost per cake 2.27 1.18 0.11 $3,383.00 Direct labor Overhead (box, etc.) Fixed cost per month Required: 1. Calculate Cove's new break-even point under each of the following independent scenarios: (Round your answer to the nearest whole number.) a. Sales price increases by $1.20 per cake. Point cakes b. Fixed costs increase by $455 per month. Point cakes c. Variable costs decrease by $0.37 per cake. cakes d. Sales price decreases by $0.30 per cake. cakes 2. Assume that Cove sold 365 cakes last month. Calculate the company's degree of operating leverage. (Do not round intermediate calculations. Round your answer to 2 decimal places.) 3. Using the dogree of operating everag@ calculate in Requirernent 2, calculate tho chang@ in profit caused by a 6 percent increase in sales revenue. Round your final answer to 2 decimal places i e .1234 should be entered as 12.34% on Profit
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