PA5-4 Predicting Cost Behavior, Calculating Contribution Margin and Contribution
ID: 2342193 • Letter: P
Question
PA5-4 Predicting Cost Behavior, Calculating Contribution Margin and Contribution Margin Ratio, Calculating Profit LO 5-1, 5-5 Presidio, Inc. produoes one model of mountain bike. Partial information for the company follows: Required: 1. Complete Presidio's cost data table. (Round your Cost per Unit answers to 2 decimal places.) Bikes Produced and Sold 510 Units 830 Units 1218 Unit Total casts Variable oats $137,700 Fixed casts per year Total costs Cost per unit Variable cost per unit Fixed cost per unit Totsl cost per unit 559.00 2. Calculate Presidio's contribution margin ratio and its total contribution margin at each sales level indicated in the cost data table assuming the company sells each bike for $640 (Round your Margin Ratio percentage answers to 2 decimal places (i.e. .1234 should be entered as 12.347.)) 510 Units 830 Units 1216 Units Total Contribution Margin Contribution Margin Ratio 3. Calculate net operating income (loss) at each of the sales levsls assuming a sales price of $640. (Round your answers to the nearest whole dollar amount.) 510 Unit:s 830 Units 1218 Units Net Operaing Income (Loss)Explanation / Answer
Answer
510 units
830 units
1216 units
Total Costs:
Variable costs
$ 137,700.00
$ 224,100.00
$ 328,320.00
Fixed Cost per year
$ 239,870.00
$ 239,870.00
$ 239,870.00
Total Costs
$ 377,570.00
$ 463,970.00
$ 568,190.00
Cost per unit:
Variable cost per unit
$ 270.00
$ 270.00
$ 270.00
Fixed cost per unit
$ 470.33
$ 289.00
$ 197.26
Total cost per unit
$ 740.33
$ 559.00
$ 467.26
---working
510 units
830 units
1216 units
Total Costs:
Variable costs
137700
=830*270
=1216*270
Fixed Cost per year
239870
=289*830
239870
Total Costs
Total Costs
Total Costs
Total Costs
Cost per unit:
Variable cost per unit
=137700/510
270
270
Fixed cost per unit
=239870/510
=559-270
=239870/1216
Total cost per unit
Total cost per unit
559
Total cost per unit
Working
510 units
830 units
1216 units
A
Sale price per unit
$ 640.00
$ 640.00
$ 640.00
B
Variable cost per unit
$ 270.00
$ 270.00
$ 270.00
C = A - B
Contribution margin per unit
$ 370.00
$ 370.00
$ 370.00
D = Units x C
Total Contribution margin
$ 188,700.00
$ 307,100.00
$ 449,920.00
E = (C/A) x 100
CM Ratio
57.81%
57.81%
57.81%
Working
510 units
830 units
1216 units
A [calculated in Req 2]
Total Contribution margin
$ 188,700.00
$ 307,100.00
$ 449,920.00
B
Fixed Costs
$ 239,870.00
$ 239,870.00
$ 239,870.00
C = A - B
Net Operating Income (Loss)
$ (51,170.00)
$ 67,230.00
$ 210,050.00
510 units
830 units
1216 units
Total Costs:
Variable costs
$ 137,700.00
$ 224,100.00
$ 328,320.00
Fixed Cost per year
$ 239,870.00
$ 239,870.00
$ 239,870.00
Total Costs
$ 377,570.00
$ 463,970.00
$ 568,190.00
Cost per unit:
Variable cost per unit
$ 270.00
$ 270.00
$ 270.00
Fixed cost per unit
$ 470.33
$ 289.00
$ 197.26
Total cost per unit
$ 740.33
$ 559.00
$ 467.26
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