# Cove’s Cakes is a local bakery. Price and cost information follows: Cove’s Cakes is a local bake

Cove’s Cakes is a local bakery. Price and cost information follows:

Cove's Cakes is a local bakery. Price and cost information follows: $ 14.41 Price per cake Variable cost per cake Ingredients Direct labor Overhead (box, etc.) Fixed cost per month 2.34 1.15 0.25 $4,374.70 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 $1.60 per cake. Break-Even Point cakes b. Fixed costs increase by $505 per month. Break-Even Point cakes cakes c. Variable costs decrease by $0.26 per cake. Break-Even Point cakes d. Sales price decreases by $0.70 per cake. Break-Even Point Bronk-Even cakes cakes 2. Assume that Cove sold 430 cakes last month. Calculate the company's degree of operating leverage. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Degree of Operating Leverage 3. Using the degree of operating leverage calculated in Requirement 2, calculate the change in profit caused by a 13 percent increase in sales revenue. (Round your final answer to 2 decimal places (i.e. .1234 should be entered as 12.34%.)) Effect on Profit

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