Question
Ramada Company produces one golf cart model. A partially complete table of company costs follows: Number of golf carts produced and sold 400 600 800
Ramada Company produces one golf cart model. A partially complete table of company costs follows:
Number of golf carts produced and sold | 400 | 600 | 800 |
---|---|---|---|
Total costs | |||
Variable costs | $ ?Question mark | $ 384,000 | $ ?Question mark |
Fixed costs per year | ?Question mark | 144,000 | ?Question mark |
Total costs | ?Question mark | $ 528,000 | ?Question mark |
Cost per unit | |||
Variable cost per unit | ?Question mark | ?Question mark | ?Question mark |
Fixed cost per unit | ?Question mark | ?Question mark | ?Question mark |
Total cost per unit | ?Question mark | ?Question mark | ?Question mark |
Required:
1. Complete the table.
2. Ramada sells its carts for $1,600 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. Ramada sells its carts for $1,600 each.
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 $48,000 profit. Ramada sells its carts for $1,600 each.
7. Calculate Ramadas degree of operating leverage if it sells 650 carts. Ramada sells its carts for $1,600 each.
8. Using the degree of operating leverage, calculate the change in Ramadas profit if sales are 15 percent less than expected.
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