Bevard Nuptial Bakery Makes Very Elaborate Wedding Cakes to Order

question 48

Multiple Choice

Bevard Nuptial Bakery makes very elaborate wedding cakes to order. The company has an activity-based costing system with three activity cost pools. The activity rate for the Size-Related activity cost pool is $0.96 per guest. (The greater the number of guests, the larger the cake.) The activity rate for the Complexity-Related cost pool is $28.92 per tier. (Cakes with more tiers are more complex.) Finally, the activity rate for the Order-Related activity cost pool is $78.19 per order. (Each wedding involves one order for a cake.) The activity rates include the costs of raw ingredients such as flour, sugar, eggs, and shortening. The activity rates do not include the costs of purchased decorations such as miniature statues and wedding bells, which are accounted for separately.
Data concerning two recent orders appear below:

-Assuming that all of the costs listed above are avoidable costs in the event that an order is turned down,what amount would the company have to charge for the Euertz wedding cake to just break even?

• A)$297.27
• B)$78.19
• C)$245.68
• D)$15.45

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Definitions:

E(x)

The expected value of a random variable, representing the mean or average value the variable takes over a large number of experiments or trials.

Project Life Cycle

The series of phases that a project goes through from its inception to its closure, typically including initiation, planning, execution, monitoring, and closing.

Execution

The phase in project management where plans are put into action to create the project's deliverables, adhering to agreed specifications and timelines.

Closeout

The final phase of a project where all activities are completed, documents are finalized, and the project is officially concluded.