Answered step by step
Verified Expert Solution
Link Copied!
Question
1 Approved Answer

Ramada Company produces one golf cart model. A partially complete table of company costs follows: Required: 1. Complete the table. (Round your Cost per Unit

image text in transcribedimage text in transcribed

Ramada Company produces one golf cart model. A partially complete table of company costs follows: Required: 1. Complete the table. (Round your "Cost per Unit" answers to 2 decimal places.) Number of Golf Carts Produced and Sold 800 Units 1000 Units 1200 Units Total costs Variable costs $ 600,000 $ 700,000 500,000 $ 360,000 Fixed costs per year 360,000 360,000 960,000 $ 1,060,000 Total costs $ 860,000 $ $ 625.00 $ 600.00 Cost per unit Variable cost per unit Fixed cost per unit Total cost per unit $ 625.00 $ 600.00 $ 0.00 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. Golf Carts Produced and Sold 800 units 1000 units 1200 units Contribution Margin Net Operating Income 4. Calculate Ramada's break-even point in number of units and in sales revenue. (Round your final answers to the nearest whole number.) Break-Even Units Carts Break-Even Sales Revenue 5. Assume Ramada sold 450 carts last year. Without performing any calculations, determine whether Ramada earned a profit last year. O No O Yes 6. Calculate the number of carts that Ramada must sell to earn $90,000 profit. Target Unit Sales Carts 7. Calculate Ramada's degree of operating leverage if it sells 1,050 carts. (Round your answer to 4 decimal places. (i.e. .12345 should be entered as 12.345%.)) Degree of Operating Leverage 8. Using the degree of operating leverage, calculate the change in Ramada's profit if sales are 15 percent less than expected. (Round your answer to 3 decimal places.) Effect on Profit %

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image
Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Cost Accounting Planning And Control

Authors: Milton F Usry

9th Edition

053801881X, 978-0538018814

More Books

Students explore these related Accounting questions