PA6-1 Calculating Contribution Margin, Contribution MarginRatio, Break-Even Point [LO 6-1, 6-2]
Hermosa, Inc., produces one model of mountain bike. Partialinformation for the company follows:
| | | | | | | |
| Number of bikesproduced and sold | | 520 | | 820 | | 1,000 |
| Total costs | | | | | | |
| Variablecosts | $ | 123,240 | $ | ? | $ | ? |
| Fixed costs peryear | | ? | | ? | | ? |
| Total costs | | ? | | ? | | ? |
| Cost perunit | | | | | | |
| Variable costper unit | | ? | | ? | | ? |
| Fixed cost perunit | | ? | | ? | | ? |
| Total cost perunit | | ? | $ | 524.75 | | ? |
|
Required:
1. Complete the table. (Roundyour "Cost per Unit" answers to 2 decimalplaces.)
| Number of bikes produced and sold | 520 units | 820 units | 1000 units |
| Total Costs | | | |
| Variable Costs | $123,340 | | |
| Fixed Costs per year | | | |
Total Cost | $123,240 | $0 | $0 |
| Cost per unit | | | |
| Variable cost per unit | | | |
| Fixed cost per unit | | | |
| Total cost per unit | $0.00 | $574.75 | $0.0 |
2. Calculate Hermosa’s contribution margin ratioand its total contribution margin at each sales level indicated inthe table assuming the company sells each bike for $800.(Round your percentage answers to 2 decimal places. (i.e..1234 should be entered as 12.34%.))
| 520 units | | 820 units | | 1000 units | |
| Contribution Margin Unit | | % | | % | | % |
| Total Contribution margin ratio | | | | | | |
4. Calculate Hermosa’s break-even point inunits and sales revenue. (Round your answers to the nearestwhole number.)
| Break-even units | | Bikes |
| Break-Even Sales Revenue | | |
