Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Electrify company make a high-quality electric bike that sells for 350 per unit. Variable cost incurred to make and sell this bike amounted to 150
Electrify company make a high-quality electric bike that sells for 350 per unit. Variable cost incurred to make and sell this bike amounted to 150 and the fixed costs total 200,000 per year. The sales manager has recently attended a workshop on CVP analysis, and he would like to apply it with this product. He has the following questions and come to ask for your help, as the management accountant of the company. 3. With the cost information of the electric bike, determine the following: (a) What is the contribution margin ratio? (Round your answer to the nearest whole percent.) (b) Using the CM ratio to determine the break-even point (Round you intermediate percentage calculation to whole percent. Round your final answer to the nearest whole dollar.) (c) The company estimates the revenue will increase by 50,000 next year. How much would the profit increase assuming the fixed costs do not change? (Round you intermediate percentage calculation to whole percent. Round your final answer to the nearest whole dollar.)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started