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Atlantic Manufacturing produces and sells children's bikes at an average price of $120. Its costs are as follows: direct materials = $12; direct labour - $8; variable overhead = $4; sales commission is 5% of price. Its fixed monthly costs are $47,000. Required: 1. Using the above cost data, set up a monthly cost equation. 2. What is the company's contribution margin percentage? (Round your answer to 2 decimal places.) Contribution margin %

Atlantic Manufacturing produces and sells children's bikes at an average price of $120. Its costs are as follows: direct materials = $12; direct labour - $8; variable overhead = $4; sales commission is 5% of price. Its fixed monthly costs are $47,000. Required: 1. Using the above cost data, set up a monthly cost equation. 2. What is the company's contribution margin percentage? (Round your answer to 2 decimal places.) Contribution margin %

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Atlantic Manufacturing produces and sells children's bikes at an average price of $120. Its costs are as follows: direct materials = $12; direct labour = $8; variable overhead = $4; sales commission is 5% of price. Its fixed monthly costs are $47,000. Required: 1. Using the above cost data, set up a monthly cost equation. 2. What is the company's contribution margin percentage? (Round your answer to 2 decimal places.) Contribution margin 96
Transcribed Image Text:Atlantic Manufacturing produces and sells children's bikes at an average price of $120. Its costs are as follows: direct materials = $12; direct labour = $8; variable overhead = $4; sales commission is 5% of price. Its fixed monthly costs are $47,000. Required: 1. Using the above cost data, set up a monthly cost equation. 2. What is the company's contribution margin percentage? (Round your answer to 2 decimal places.) Contribution margin 96
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