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Ramada Company produces one golf cart model. A partially complete table of company costs follows: Number of golf carts produced and sold Total costs
Ramada Company produces one golf cart model. A partially complete table of company costs follows: Number of golf carts 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 Required: 1. Complete the table. 800 1,000 1,200 $ ? $ 600,000 $ ? ? 360,000 ? ? $ 960,000 ? ? ? ? ? ? ? ? ? ? 2. 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. 4. Calculate Ramada's break-even point in number of units and in sales revenue. Ramada sells its carts for $1,500 each. 5. Assume Ramada sold 450 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 $90,000 profit. Ramada sells its carts for $1,500 each. 7. Calculate Ramada's degree of operating leverage if it sells 1,050 carts. Ramada sells its carts for $1,500 each. 8. Using the degree of operating leverage, calculate the change in Ramada's profit if sales are 15 percent less than expected. Required 1 Required 2 Required 4 Required 5 Required 6 Required 7 Required 8 800 Units 1,000 Units 1,200 Units Complete the table. Note: Round your "Cost per Unit" answers to 2 decimal places. Number of Golf Carts 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 $ 600,000 360,000 0 $ 960,000 $ 0 $ 0.00 $ 0.00 $ 0.00 Required 1 Required 2 Required 4 Required 5 Required 6 Required 7 Required 8 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. Golf Carts Produced and Sold Contribution Margin Income from Operations 800 units 1,000 units 1,200 units
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