Mary's Baked Creations supplies boxes of home baked cookies to grocery chains across Ontario. The company's annual fixed costs are $49,000. The sales price of each box of cookies averages $12, and it costs Mary $5 to make and deliver each box.
Required:
A. How many boxes of cookies must Mary sell in order to break even?
B. How many boxes sell to earn a target net profit of $35,000?
C. If budgeted sales total 10,000 boxes of cookies, how much is Mary's safety margin?
D. Mary's assistant manager, an accounting major, has suggested that the company should try to increase the contribution margin per box. Explain the meaning of "contribution margin" in layman's terms.

Question

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The Answer of Mary's Baked Creations supplies boxes of home baked cookies to grocery chains across Ontario. The company's annual fixed costs are $49,000. The sales price of each box of cookies averages $12, and it costs Mary $5 to make and deliver each box.
Required:
A. How many boxes of cookies must Mary sell in order to break even?
B. How many boxes sell to earn a target net profit of $35,000?
C. If budgeted sales total 10,000 boxes of cookies, how much is Mary's safety margin?
D. Mary's assistant manager, an accounting major, has suggested that the company should try to increase the contribution margin per box. Explain the meaning of "contribution margin" in layman's terms.

Mary's Baked Creations Supplies Boxes of Home Baked Cookies to Grocery