Assume Segway produces and sells Segway helmets for kids. Further assume Segway offered these helmets at a special price of $$120$ each. Variable and fixed costs follow.

Variable Cost per Helmets Fixed Costs per Month

Manufacturing Manufacturing overhead $$45,000$

Direct materials $$45$ Selling and administrative $30,000$

Direct labor $9$ Total $$75,000$

Manufacturing overhead $30$ $$84$

Selling and administrative $6$

Total $$90$

Suppose in June, Segway produced and sold $3,000$ helmets.

Required

a$.$ Prepare a contribution income statement for June.

SEGWAY COMPANY

Contribution Income Statement

For the Month of June

Answer $1$

Less variable costs

Answer $2$

Answer $3$

Answer $4$

Answer $5$

Answer $6$

Less fixed costs

Answer $7$

Answer $8$

Answer $9$

b$.$ Calculate and explain the relevance of Segway's unit contribution margin and contribution margin ratio.

Contribution margin per unit Answer $10$

$0$

Contrubution margin ratio Answer $11$

$0$

For each helmet sold at $Answer $12$

$0$

$,$ Segway had $Answer $13$

$0$

more to cover fixed costs and contribute toward profit. Stated another way, Answer $14$

$0$

$\%$ of the revenue was left to cover fixed costs and contribute toward profit. In the short$-$term, as long as there is capacity, Segway Answer $15$

continue producing and selling the helmets.