Answered step by step
Verified Expert Solution
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
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 400 Units 500 Units 600 Units Total costs Variable costs $ 330,000 Fixed costs per year 120,000 Total costs o 450,000 $ Cost per unit Variable cost per unit Fixed cost per unit Total cost per unit 0.00 $ 0.00 $ 0.00 2. Ramada sells its carts for $1,650 each. Prepare a contribution margin income statement for each of the three production levels given in the table. Golf Carts Produced and Sold 400 units 500 units 600 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 200 carts last year. Without performing any calculations, determine whether Ramada earned a profit last year. Yes No 6. Calculate the number of carts that Ramada must sell to earn $28,500 profit. Target Unit Sales Carts 7. Calculate Ramada's degree of operating leverage if it sells 550 carts. (Round your answer to 4 decimal places. (i.e. .12345 should be entered as 12.345%.)) Degree of Operating 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
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started