Ramada Company produces one golf cart model. A partially complete table of company costs follows:

Number of Golf Carts Produced and Sold 800 Units 1000 Units 1200 Units

Total costs

Variable Cost $600,000

Fixed costs per year $360,000

Total costs $960,000

Cost per unit

Variable cost per unit

Fixed cost per unitTotal cost per unit

1. Ramada sells its carts for $1,500 each. Prepare a contribution margin income statement for each of the three production levels given in the table.

2.Calculate Ramadas break-even point in number of units and in sales revenue.

3. Assume Ramada sold 450 carts last year. Without performing any calculations, determine whether Ramada earned a profit last year.?

4. Calculate the number of carts that Ramada must sell to earn $90,000 profit.

5. Using the degree of operating leverage, calculate the change in Ramadas profit if sales are 15 percent less than expected.