Variable and Fixed Costs Analyses Blade Corporation manufactures two types of inline skates—a basic model and a racing model. During the year 2009, Blade accumulated the following summary information about its two products:

Required:
1. Use the high-low method to estimate the variable and fixed production costs of both the racing model and the basic model skates.
2. All selling costs are fixed, and they total $200,000 for the racing model and $80,000 for the basic model. Prepare a contribution margin income statement for each model at sales of 10,000 racing and 10,000 basic skates.

Transcribed Image Text:

Racing Model Basic Model Selling price $130 $65 Number of units manufactured and sold 14,000 9,000