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CVP analysis

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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.

Required

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?

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Solution Summary

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

Solution Preview

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

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