Question
Hermosa, Incorporated produces one model of mountain bike. Partial information for the company follows: Number of bikes produced and sold Total costs Variable costs
Hermosa, Incorporated produces one model of mountain bike. Partial information for the company follows: Number of bikes produced and sold Total costs Variable costs Fixed costs per year Total costs Cost per unit Variable cost per unit Fixed cost per unit Total cost per unit 480 $ 115,600 780 57 7 ? $527.75 940 57 37 ? Required: 1. Complete the table. 2. Calculate Hermosa's contribution margin ratio and its total contribution margin at each sales level indicated in the table assuming the company sells each bike for $820. 4. Calculate Hermosa's break-even point in units and sales revenue.
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