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Step-by-step explanation:

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a) At break even point, Q = 380 units, Sales dollar = $5247.8

b) Margin of safety at Q = 400 units is 0.05 × 100 = 5

c) Number of cakes that need to be sold before a profit of $2200 is made = 595 cakes

Step-by-step explanation:

Let the number of units be Q

Cost equation = (fixed cost) + (Variable cost)

Fixed Cost = $3898.8

Variable Cost = Variable cost per unit × number of units produced = (2.32 + 1.11 + 0.12) × Q = 3.55Q

Cost equation = 3898.8 + 3.55Q

Revenue = price per unit × number of units sold = 13.81 × Q = 13.81Q

At break even point,

Total cost = Revenue

3898.8 + 3.55Q = 13.81Q

10.26Q = 3898.8

Q = 380 units

In sales dollars, R = 13.81Q = 13.81 × 380 = $5247.8

b) Margin of safety = 100 × (Current sales - Breakeven point sales)/(current sales)

Breakeven point sales = $5247.8

At Q = 400 units, Current sales = 13.81 × 400 = $5524

Margin of safety = 100 × (5524 - 5247.8)/5524 = 5

c) number of cakes that Cove must sell to generate $2,200 in profit.

Profit = Revenue - Total Cost

2200 = 13.81Q - (3898.8 + 3.55Q)

2200 = 10.26Q - 3898.8

10.26Q = 2200 + 3898.8 = 6098.8

Q = 594.4 = 595 units