PA6-4 (Algo) Analyzing Break-Even Point, Target Profit, Degree of Operating Leverage [LO 6-1, 6-2, 6-5) Ramada Company produces one golf cart model. A partially complete table of company costs follows: 800 1,000 1,200 $ ? 2 $ Number of golf carts produced and sold Total costa Variable costs Fixed costs per year Total costs Cost per unit Variable cost per unit Fixed cost per unit Total cost per unit ? ? ? $500,000 240,000 740,000 2 ? 2 ? ? ? 2 ? Required: 1. Complete the table. 2. Ramada sells its carts for $1,250 each. Prepare a contribution margin income statement for each of the three production levels given in the table. 4. Calculate Ramada's break-even point in number of units and in sales revenue. 5. Assume Ramada sold 350 carts last year. Without performing any calculations, determine whether Ramada earned a profit last year. 6. Calculate the number of carts that Ramada must sell to earn $30,000 profit. 7. Calculate Ramada's degree of operating leverage if it sells 1,050 carts. 8. Using the degree of operating leverage, calculate the change in Ramada's profit if sales are 10 percent less than expected. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 4 Required 5 Required 6 Required 7 Required & Complete the table. (Round your "Cost per Unit" answers to 2 decimal places.) Number of Golf Carts Produced and Sold 800 Units 1,000 Units 1,200 Units Total costs Variable costs $ 500,000 Fixed costs per year 240,000 Total costs $ 740,000 Cost per unit Variable cost per unit Fixed cost per unit Total cost per unit Required 1 Required 2 > Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 4 Required 5 Required 6 Required 7 Required 8 Ramada sells its carts for $1,250 each. Prepare a contribution margin income statement for each of the three production levels given in the table. Golf Carts Produced and Sold 800 units 1,000 units 1,200 units Contribution Margin Income from Operations Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 4 Required 5 Required 6 Required 7 Required 8 Calculate the number of carts that Ramada must sell to earn $30,000 profit. Target Unit Sales Carts Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 4 Required 5 Required 6 Required 7 Required 8 Calculate Ramada's degree of operating leverage if it sells 1,050 carts. (Round your answer to 4 decimal places.) Degree of Operating Leverage Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 4 Required 5 Required 6 Required 7 Required 8 Using the degree of operating leverage, calculate the change in Ramada's profit if sales are 10 percent less than expected. (Round your answer to 3 decimal places. (l.e. .12345 should be entered as 12.345%.)) Effect on Profit %
