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 %
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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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