A company manufactures and sells racing bicycles to specialty retailers. The Bomber model sells for $630 and has per-unit variable costs of $315 associated with its production. The company has fixed expenses of $40,000 per month. In May, the company sold 230 of the Bomber model bikes.

Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter3: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 2PA: A company manufactures and sells racing bicycles to specialty retailers. The Bomber model sells for...
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A company manufactures and sells racing bicycles to specialty retailers. The Bomber model sells for $630 and has per-unit variable costs of $315 associated with its production. The company has fixed expenses of $40,000 per month. In May, the company sold 230 of the Bomber model bikes.

A. Calculate the contribution margin per unit for the Bomber.

Contribution margin $____ per unit

B. Calculate the contribution margin ratio of the Bomber.

Contribution margin ratio _____%

C. Prepare a contribution margin income statement for the month of May. Use a minus sign for a net loss if present.

Income Statement

  $
   
  $
   
  $
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