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Question: A bakery specializes in cupcakes and chocolate


A bakery specializes in cupcakes and chocolate cookies. The bakery estimates that cupcakes will account for 75% of its total sales, whereas chocolate cookies will account for 25% of its total sales. The annual fixed cost to make these products is $20,000. The variable cost including ingredients and labor to make a cupcake is $1.00 and to make a chocolate cookie is $ 0.50. The bakery sells cupcakes for $3.50 per piece and chocolate cookies for $2.50 per piece.
a. How many units of each item, cupcakes and chocolate cookies, will the bakery need to sell to breakeven?
b. What is the breakeven point in sales in dollars?



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