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

Number of golf carts produced and sold		400		500		600
Total costs
Variable costs	$	?	$	230,000	$	?
Fixed costs per year		?		120,000		?
Total costs		?		350,000		?
Cost per unit
Variable cost per unit		?		?		?
Fixed cost per unit		?		?		?
Total cost per unit		?		?		?

Required: 1. Complete the table.

2. Ramada sells its carts for $1,150 each. Prepare a contribution margin income statement for each of the three production levels given in the table.

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

5. Assume Ramada sold 200 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 $18,000 profit.

7. Calculate Ramadas degree of operating leverage if it sells 550 carts.

8. Using the degree of operating leverage, calculate the change in Ramadas 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 8

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

required1

Number of Golf Carts Produced and Sold	400 Units	500 Units	600 Units
Total costs
Variable costs	1.)	$230,000	3.)
Fixed costs per year	2.)	120,000	4.)
Total costs	$0	$350,000	$0
Cost per unit
Variable cost per unit	5.)	6.)	7.)
Fixed cost per unit	8.)	9.)	10.)
Total cost per unit	$0.00	$0.00	$0.00

Ramada sells its carts for $1,150 each. Prepare a contribution margin income statement for each of the three production levels given in the table.

required 2

Golf Carts Produced and Sold	400 units	500 units	600 units
Contribution Margin
Income from Operations

choose from Costs of goods Sold, Fixed Costs, Gross Margin, Interest Expense, net Income after Taxes, Net Operating Income, Sales Revenue, and Variable Costs for Required 2 Contribution Margin Income Statement.

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

required 4

Break-Even Units		Carts
Break-Even Sales Revenue

Assume Ramada sold 200 carts last year. Without performing any calculations, determine whether Ramada earned a profit last year.

required 5
	Yesradio button checked1 of 2 Noradio button unchecked2 of 2

Calculate the number of carts that Ramada must sell to earn $18,000 profit.

required 6

Target Unit Sales

Carts

Calculate Ramadas degree of operating leverage if it sells 550 carts. (Round your answer to 4 decimal places.)

required 7
	Degree of Operating Leverage

required 8

Using the degree of operating leverage, calculate the change in Ramadas profit if sales are 10 percent less than expected. (Round your answer to 3 decimal places. (i.e. .12345 should be entered as 12.345%.))

Effect on Profit

%