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2. A bakery sells cakes for special occasions. The cost to make each cake is 200 pesos, and they are being sold for 500 pesos each. The bakery has already spent 5000 pesos on equipment. How many cakes must be made and sold to break even?

Question

03-04-2025
Business

College

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Name:
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2. A bakery sells cakes for special occasions. The cost to make each cake is 200 pesos, and they are being sold for 500 pesos each. The bakery has already spent 5000 pesos on equipment. How many cakes must be made and sold to break even?

Answer :

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GinnyAnswer GinnyAnswer · Answer 1 · 2024-08-08T19:45:00-04:00

Final answer:

To break even, the bakery must sell 17 cakes. This calculation is based on fixed costs and the difference between selling price and production cost. The break-even analysis shows how many cakes need to be sold to cover costs.

Explanation:

Understanding Break-Even Analysis

The bakery's goal is to determine how many cakes it must sell to break even, which means covering both fixed and variable costs. In this scenario, the costs are defined as follows:

Cost to make each cake: 200 pesos (Variable Cost)
Selling price per cake: 500 pesos
Total fixed costs: 5000 pesos (cost of equipment)

To calculate the break-even point, we can use the break-even formula:

Break-even Quantity (Q) = Total Fixed Costs / (Selling Price - Variable Cost)

Substituting in the known values:

Fixed Costs = 5000 pesos
Selling Price = 500 pesos
Variable Costs = 200 pesos

Thus, we have:

Q = 5000 / (500 - 200)

Calculating the denominator:

Q = 5000 / 300 = 16.67

Since we cannot sell a fraction of a cake, we round up to the nearest whole number, meaning the bakery needs to sell 17 cakes to achieve a break-even point.

Learn more about Break-even calculation here:

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Name: Section: Schedule: Class number: Date: 2. A bakery sells cakes for special occasions. The cost to make each cake is 200 pesos, and they are being sold for 500 pesos each. The bakery has already spent 5000 pesos on equipment. How many cakes must be made and sold to break even?

Answer :

Final answer:

Explanation:

Understanding Break-Even Analysis

Learn more about Break-even calculation here:

Other Questions

Name:
Section:
Schedule:
Class number:
Date:

2. A bakery sells cakes for special occasions. The cost to make each cake is 200 pesos, and they are being sold for 500 pesos each. The bakery has already spent 5000 pesos on equipment. How many cakes must be made and sold to break even?