Introduction to Management Science 12th Edition by Bernard Taylor

Exercise 34

If the maximum operating capacity of the Gobblecakes bakery described in Problem is 12,000 cupcakes annually, determine the break-even volume as a percentage of that capacity.
Problem
Gobblecakes is a bakery that specializes in cupcakes. The annual fixed cost to make cupcakes is $18,000. The variable cost including ingredients and labor to make a cupcake is $0.90. The bakery sells cupcakes for $3.20 apiece.
a. If the bakery sells 12,000 cupcakes annually, determine the total cost, total revenue, and profit.
b. How many cupcakes will the bakery need to sell in order to break even