Cute Vélo Inc. produces and sells children's bikes at an average price of $72. Its costs are as follows: direct materials, $16; direct labour, $11; variable overhead, $6; sales commission, 5% of price. Its fixed monthly costs are $43,000. Required: 1. Using the above cost data, set up a monthly cost equation. (Round your answer to 1 decimal place.) Y = X 2. What is the company's contribution margin percentage? (Round your answer to 2 decimal places.) Contribution margin.
Cute Vélo Inc. produces and sells children's bikes at an average price of $72. Its costs are as follows: direct materials, $16; direct labour, $11; variable overhead, $6; sales commission, 5% of price. Its fixed monthly costs are $43,000. Required: 1. Using the above cost data, set up a monthly cost equation. (Round your answer to 1 decimal place.) Y = X 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
Related questions
Question
Denger
Transcribed Image Text:Cute Vélo Inc. produces and sells children's bikes at an average price of $72. Its costs are as follows: direct materials, $16; direct
labour, $11; variable overhead, $6; sales commission, 5% of price. Its fixed monthly costs are $43,000.
Required:
1. Using the above cost data, set up a monthly cost equation. (Round your answer to 1 decimal place.)
Y =
X
2. What is the company's contribution margin percentage? (Round your answer to 2 decimal places.)
Contribution margin
%
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 5 steps
Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education