Description
Accounting Question
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Mountain Bagels bakes and sells authentic New York style kettle-boiled bagels. For the most
recent year, Mountain Bagels sold 250,000 bagels at a selling price of $1 per bagel. During this
same year, Mountain Bagels incurred fixed costs of $100,000 and variable costs of $0.40 per
bagel.
Management of Mountain Bagels is considering extending their product line to include bagel
sandwiches. Management estimates that adding bagel sandwiches would increase their total fixed
costs by $25,000 per year and that the variable cost per bagel sandwich would be $1.80.
REQUIRED:
a. Ignoring the new product line, how does Mountain Bagels' profit increase or decrease
with the number of bagels sold? What was Mountain Bagels' profit for the most recent
year?
b. How would adding bagel sandwiches change Mountain Bagels' profit? What information
would you need before you can determine how introducing bagel sandwiches would
affect Mountain Bagels' overall profit? Is it reasonable to assume Mountain Bagels will
still sell 250,000 bagels?
c. Assume Mountain Bagels believes that, in addition to selling 250,000 bagels in the
coming year, it can sell 25,000 bagel sandwiches. What price should Mountain Bagels
charge per bagel sandwich if it wishes to increase overall profit by $50,000?
d. Assume Mountain Bagels believes that it can sell 25,000 bagel sandwiches at $4.50 but
that this will reduce the number of bagels sold by 25,000 to 225,000 (i.e., there is a onefor-one tradeoff between bagels and bagel sandwiches). Assuming this sales mix remains
constant, what is the break even point in sales dollars and units for each product?
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Explanation & Answer
A)
Data for current period for sale of Mountain Bagels
Sale Price
Less: Variable cost
Contribution
Less: Fixed Costs
Profit
Details
250000 bagels x $ 1
250000 bagels x $ 0.40
Sale - Variable cost
Amount
250000
100000
150000
100000
50000
With every increase in number of unit sold, profits will go on increasing and with fall in number of units sold, profits
reduced
Curr...
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Cuymaca College In House Training Time Management Dyna Energy Flyer
GETTING STARTED
Open the file SC_WD19_EOM1-2_FirstLastName_1.docx, available for download from the SAM website.
Sav ...
Cuymaca College In House Training Time Management Dyna Energy Flyer
GETTING STARTED
Open the file SC_WD19_EOM1-2_FirstLastName_1.docx, available for download from the SAM website.
Save the file as SC_WD19_EOM1-2_FirstLastName_2.docx by changing the “1” to a “2”.
oIf you do not see the .docx file extension in the Save As dialog box, do not type it. The program will add the file extension for you automatically.
With the file SC_WD19_EOM1-2_FirstLastName_2.docx still open, ensure that your first and last name is displayed in the footer.
oIf the footer does not display your name, delete the file and download a new copy from the SAM website.
PROJECT STEPS
1.As a member of the Training Department at Dyna Energy, you are creating a flyer about in-house training sessions on time management. Change the margins to Narrow.
2.Add a ½-point Blue, Accent 1 page border using the double line style (the seventh border in the Style list).
3.Shade the paragraph below the headline with Turquoise, Accent 3, Darker 25%, and then change the font color to White, Background 1.
4.Apply the Perspective Left 3-D Rotation to the time management picture on the right.
5.Bold the date "Thursday, February 11" in the paragraph below the pictures.
6.Italicize the paragraph containing the text "Silver Spring training room" and then change the spacing after the paragraph to 18 point.
7.Delete the text "develop practical skills to" in the paragraph "These training sessions…practical skills:".
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12.Edit the document properties to add the text Dyna Energy flyer as the Title property.
Your document should look like the Final Figure on the following pages. Save your changes, close the document, and then exit Word. Follow the directions on the SAM website to submit your completed project.
Final Figure
© sibgat/Shutterstock.com; © popcic/Shutterstock.com
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Cuymaca College In House Training Time Management Dyna Energy Flyer
GETTING STARTED
Open the file SC_WD19_EOM1-2_FirstLastName_1.docx, available for download from the SAM website.
Sav ...
Cuymaca College In House Training Time Management Dyna Energy Flyer
GETTING STARTED
Open the file SC_WD19_EOM1-2_FirstLastName_1.docx, available for download from the SAM website.
Save the file as SC_WD19_EOM1-2_FirstLastName_2.docx by changing the “1” to a “2”.
oIf you do not see the .docx file extension in the Save As dialog box, do not type it. The program will add the file extension for you automatically.
With the file SC_WD19_EOM1-2_FirstLastName_2.docx still open, ensure that your first and last name is displayed in the footer.
oIf the footer does not display your name, delete the file and download a new copy from the SAM website.
PROJECT STEPS
1.As a member of the Training Department at Dyna Energy, you are creating a flyer about in-house training sessions on time management. Change the margins to Narrow.
2.Add a ½-point Blue, Accent 1 page border using the double line style (the seventh border in the Style list).
3.Shade the paragraph below the headline with Turquoise, Accent 3, Darker 25%, and then change the font color to White, Background 1.
4.Apply the Perspective Left 3-D Rotation to the time management picture on the right.
5.Bold the date "Thursday, February 11" in the paragraph below the pictures.
6.Italicize the paragraph containing the text "Silver Spring training room" and then change the spacing after the paragraph to 18 point.
7.Delete the text "develop practical skills to" in the paragraph "These training sessions…practical skills:".
8.In the same paragraph, accept the suggested spelling change to delete the repeated word.
9.Number the nine paragraphs before the signature line, beginning with the paragraph "Manage time." and ending with the paragraph "Learn to reward yourself for finishing work."
10.Copy the text "important tasks" from the paragraph before the numbered list, and then paste it before the period in list item 1b ("Set priorities to complete.")
11.Change the font of the signature line to Calibri Light. Change the font size to 16 point, and then center the paragraph.
12.Edit the document properties to add the text Dyna Energy flyer as the Title property.
Your document should look like the Final Figure on the following pages. Save your changes, close the document, and then exit Word. Follow the directions on the SAM website to submit your completed project.
Final Figure
© sibgat/Shutterstock.com; © popcic/Shutterstock.com
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