Atlantic Manufacturing produces and sells childrens bikes at an average price of $120. Its costs are as follows: direct materials = $12; direct labour = $6; variable overhead = $4; sales commission is 5% of price. Its fixed monthly costs are $54,000.

Required:

1. Using the above cost data, set up a monthly cost equation.

Y=______+_______X

2. What is the companys contribution margin percentage? (Round your answer to 2 decimal places.)

Contribution margin:_________%