ne I STInet × Cengage x Chapter 6, Assign ge C | ezto.mheducation.com/hm.tpx?--0
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ne I STInet × Cengage x Chapter 6, Assign ge C | ezto.mheducation.com/hm.tpx?--0.2501030912581773_1521045091217 è Overview-and-Introd D Home Ismnetcengage M McGraw-Hill Connect a New Tab Search Ramada Company produces one golf cart model. A partially complete table of company costs follows Required: 1. Complete the table. (Round your "Cost per Unit" answers to 2 decimal places.) Number of Golf Carts Produced and Sold 1500 Units 2000 Units 2500 Units Total costs Variable costs Fixed costs per year $ 840,000 600,000 $ 1,440,000 Total costs Cost per unit Variable cost per unit Fixed cost per unit Total cost per unit 2. Ramada sells its carts for $1.050 each. Prepare a contribution margin income statement for each of the t Golf Carts Produced and Sold1500 units 2000 units 2500 units Contribution Margin Type here to searchExplanation / Answer
Req 1: Table: Number of Golf carts 1500 units 2000 units 2500 units Total cost Variable cost 630,000 840,000 1050000 Fixed cost 600,000 600,000 600,000 Total cost 1,230,000 1,440,000 1,650,000 Cost per unit Variable cost per unit 420 420 420 Fixed cost per unit 400 300 240 Total cost per unit 820 720 660 Note: Total variable cocst will ary as per production unist. Note: Variable cost per unit and Fixed cost per unit is computed by dividing the total variable cocst and total fixed cost by number of units. Req 2: CONTRIBUTION MARGIN INCOME STATEMENT 1500 units 2000 units 2500 units Sales revenue @$1050 each 1575000 2100000 2625000 Less: Variable cost @$420 per unit 630000 840000 1050000 Contribution margin 945000 1260000 1575000 Less: Fixed cost 600,000 600,000 600,000 Net income 345,000 660,000 975,000 Req 3: Selling price: 1050 per unit Variable cost: 420 per unit Contribution margin: 1050 -420 = $ 630 per unit Total fixed cost: $ 600,000 CM ratio : Contribution/ Selling price : 630 /1050 *100 = 60% Break even in units: Fixed cost / Contribution margin per unit $ 600,000 /630 = 953 units Break even in $= Fixed cost/ CM ratio $ 600,000 /60% = $ 1000,000 Req 5: Yes. The Company has a earned a profits last year as sales exceeds break even. Req 6: Desired profits: 30,000 Desired contribution: Desired profits + Fixed cost = 30,000 +600,000 =630,000 Target profits in units: Desired cocntribution/ contribution margin per unit $ 630,000 /630 = 1000 units Req7. Sales units: 2050 units Contribution earned: 2050 units @630 = $1291,500 Fixed cost: $ 600,000 Nnet income: Contribution -Fixed cost = $ 1291,500 -600,000 = $ 691,500 Operating Lleverage Degree: Contribution / Net income = 1291,500 /691500 = 1.87 Req 8: Net income decreased by 18.7% (i.e. 10%*1.87)
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