PA6-1 Calculating Contribution Margin, Contribution Margin Ratio, Break-Even Poi

Question

PA6-1 Calculating Contribution Margin, Contribution Margin Ratio, Break-Even Point [LO 6-1, 6-2] Hermosa, Inc., produces one model of mountain bike. Partial information for the company follows: Number of bikes produced and sold Total costs 450 810 950 $107,100 ? Variable costs Fixed costs per year Total costs Cost per unit Variable cost per unit Fixed cost per unit Total cost per unit $527.75 Required 1. Complete the table. (Round your "Cost per Unit" answers to 2 decimal places.) Number of bikes produc Total costs 450 Units 810 Units950 Units and sold Variable costs $ 107,100 Fixed costs per year Total costs $ 107,100 S Cost per unit Variable cost per unit Fixed cost per unit Total cost per unit S 0.00527.75 S 0.00 2. Calculate Hermosa's contribution margin ratio and its total contribution margin at each sales level indicated in the table assuming the company sells each bike for $690. (Round your percentage answers to 2 decimal places. (i.e. .1234 should be entered as 12.34%.)) 450 Units 810 Units 950 Units Contribution Margin Ratio Total Contribution Margin 4. Calculate Hermosa's break-even point in units and sales revenue. (Round your answers to the nearest whole number.) Break-Even Units Break-Even Sales Revenue Bikes

Explanation / Answer

1 Particulars No of Bikes Produced & Sold 450 810 950 Total Costs: Variable Costs 1,07,100 1,92,780 2,26,100 Fixed Cost Per Year 2,34,698 2,34,698 2,34,698 Total Costs: 3,41,798 4,27,478 4,60,798 Cost per Unit: Variable Cost PU 238.00 238.00 238.00 Fixed Cost PU 521.55 289.75 247.05 Total Cost per Unit: 759.55 527.75 485.05 Units Level Used 450 Variable Cost PU: Variable Costs 107100 No of Units 450 Per Unit Cost 238.00 Units Level Used 810 Fixed Cost PU: Total Cost per Unit: 527.75 Less: Variable Cost PU 238.00 Fixed Cost PU 289.75 Units Level Used 810 Fixed Cost Per Year: Units Sold 810 Fixed Cost PU 289.75 Fixed Cost Per Year 234697.5 Units Level Used 450 Fixed Cost Per Year: 2,34,698 Units 450 Fixed Cost PU 521.55 Units Level Used 950 Fixed Cost Per Year: 2,34,698 Units 950 Units 247.05 2 Particulars No of Bikes Produced & Sold 450 810 950 Sales Price 690.00 690.00 690.00 Less: VC PU 238.00 238.00 238.00 Contribution Margin 452.00 452.00 452.00 Contribution Margin Ratio 65.51% 65.51% 65.51% Contribution Margin Total 203400 366120 429400 3 Break Even Point in Units: Fixed Cost/CM PU 520.00 Fixed Cost/CM Ratio 358277

Related Questions

Navigate

• Browse (All)
• Browse P
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.