day came when a buyer for a major department store offered them a contract to produce 1,500 cakes of various flavors for $10.000. The sisters realized that it was time to get down to business. To make bookkeeping simpler, they have priced all the cakes at $8 Variable cost per unit is $6 and they have to rent a facility for $4,000 a month. 1) Calculate the breakeven. 2) Calculate their COGS on the department store order. 3) Calculate their Operating Expenses on the department store order 4)

CONCEPTS IN FED.TAX.,2020-W/ACCESS
20th Edition
ISBN:9780357110362
Author:Murphy
Publisher:Murphy
Chapter6: Business Expenses
Section: Chapter Questions
Problem 37P
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Ms. Magan Dah and her sister, Ms. Supla Dah got into the cakes and pastries business almost by accident. Magan, a BSHRM graduate often bake cakes as gifts for friends: Occasionally, they would set up a booth at a trade fair and sell a few of the cakes. The day came when a buyer for a major department store offered them a contract to produce 1,500 cakes of various flavors for $10.000. The sisters realized that it was time to get down to business. To make bookkeeping simpler, they have priced all the cakes at $8 Variable cost per unit is $6 and they have to rent a facility for $4,000 a month. 1) Calculate the breakeven. 2) Calculate their COGS on the department store order. 3) Calculate their Operating Expenses on the department store order 4) Calculate their EBIT on the department store order.
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