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#### The Bakery by the Bay produces organic bread that is sold by the loaf

###### Accounting

The Bakery by the Bay produces organic bread that is sold by the loaf. Each loaf requires 1/2 of a pound of flour. The bakery pays \$2.50 per pound of the organic flour used in its loaves. The bakery expects to produce the following number of loaves in each of the upcoming four months: : (Click the icon to view the units to be produced.) The bakery has a policy that it will have 20% of the following month's flour needs on hand at the end of each month. At the end of June, there were 152 pounds of flour on hand. Prepare the direct materials budget for the third quarter, with a column for each month and for the quarter. Begin the direct materials budget by determining the total quantity needed, then complete the budget. (Enter the pounds per unit as a decimal to two places. Round your calculations to the nearest whole number.) The Bakery by the Bay Direct Materials Budget For the Months of July through September July August September Quarter Units to be produced Data Table 1,520 loaves Multiply by: Pounds of flour needed per unit Quantity needed (lbs) for production Plus: Desired ending inventory of direct materials Total quantity (lbs) needed Less: Beginning inventory of direct materials Quantity (lbs) to purchase Multiply by: Cost per pound 1,860 loaves July August September October 1,620 loaves 1,480 loaves Total cost of direct material purchases Print Done

Tasty Company sells a single product. Below were Tasty's monthly total revenue and total cost equation:

Total Revenue = RM 12(Q)
Total Cost = RM 8(Q) + RM10,200

A. Calculate Tasty's contribution margin per unit and calculate the number of units Tasty needed to sell next month to break-even.

B. Calculate the number of units Tasty needed to sell next month to generate an after-tax profit of \$1,000 if Tasty Company tax rate is 20% (round to nearest units).

C. Calculate Tasty Margin of Safety if expected sales is 2,600 units per month and what does Tasty Margin of Safety imply about Tasty business.

D. Marketing research indicated that this coming July expected sales is 2,600 units. The sales manager believes the company could increase July sales by 10% if advertising expenditures were increased by \$1,000. Would you recommend Tasty to spend the additional costs to advertise its products? Support you recommendation indicating the effect on income if the company increases advertising expenditures.