Explore BrainMass

CVP analysis

Gabby's Wedding Cakes creates elaborate wedding cakes.Each
cake sells for $600.The variable cost of making the cakes is $250,and the fixed cost per month is $7,700.


a. Calculate the break-even point for a month in units.
b. How many cakes must be sold to earn a monthly profit of $10,000?

Solution Preview

a. Breakeven units = Fixed cost/unit contribution margin
Fixed cost = ...

Solution Summary

The solution explains how to calculate the units needed for breakeven and for a desired profit