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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 400 500 600

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 $ ? $ 280,000 $ ?
Fixed costs per year ? 120,000 ?
Total costs ? 400,000 ?
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 $1,400 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 $48,000 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 15 percent less than expected.

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