PA6-1 (Algo) Calculating Contribution Margin, Contribution Margin Ratio, Break-Even Point [LO 6-1, 6-2]

Hermosa, Inc., produces one model of mountain bike. Partial information for the company follows:

Number of bikes produced and sold		500		800		1,000
Total costs
Variable costs	$	118,000	$	?	$	?
Fixed costs per year		?		?		?
Total costs		?		?		?
Cost per unit
Variable cost per unit		?		?		?
Fixed cost per unit		?		?		?
Total cost per unit		?	$	513.75		?

Required: 1. Complete the table.

2. Calculate Hermosas contribution margin ratio and its total contribution margin at each sales level indicated in the table assuming the company sells each bike for $650.

4. Calculate Hermosas break-even point in units and sales revenue.

Complete this question by entering your answers in the tabs below.

• Required 1
• Required 2
• Required 4

Complete the table. (Round your "Cost per Unit" answers to 2 decimal places.)

Number of bikes produced and sold	500 Units	800 Units	1000 Units
Total costs
Variable costs	$118,000
Fixed costs per year
Total costs
Cost per unit
Variable cost per unit
Fixed cost per unit
Total cost per unit		$513.75

• Required 2

Calculate Hermosas contribution margin ratio and its total contribution margin at each sales level indicated in the table assuming the company sells each bike for $650. (Round your percentage answers to 2 decimal places. (i.e. .1234 should be entered as 12.34%.))

	500 Units		800 Units		1000 Units
Contribution Margin Ratio		%		%		%
Total Contribution Margin

• Required 4

Calculate Hermosas break-even point in units and sales revenue. (Round your "Unit" and "Sales Revenue" answers to the nearest whole number.)

Break-Even Units		Bikes
Break-Even Sales Revenue