Hermosa, Inc., produces one model of mountain bike. Partial information for the company follows: Number of bikes produced and sold 490 830 970 Total costs Variable costs $ 113,190 $ ? $ ? Fixed costs per year ? ? ? Total costs ? ? ? Cost per unit Variable cost per unit ? ? ? Fixed cost per unit ? ? ? Total cost per unit ? $ 507.75 ? Required:1. Complete the table. 2. Calculate Hermosa’s contribution margin ratio and its total contribution margin at each sales level indicated in the table assuming the company sells each bike for $730. 4. Calculate Hermosa’s break-even point in units and sales revenue.
Hermosa, Inc., produces one model of mountain bike. Partial information for the company follows: Number of bikes produced and sold 490 830 970 Total costs Variable costs $ 113,190 $ ? $ ? Fixed costs per year ? ? ? Total costs ? ? ? Cost per unit Variable cost per unit ? ? ? Fixed cost per unit ? ? ? Total cost per unit ? $ 507.75 ? Required:1. Complete the table. 2. Calculate Hermosa’s contribution margin ratio and its total contribution margin at each sales level indicated in the table assuming the company sells each bike for $730. 4. Calculate Hermosa’s break-even point in units and sales revenue.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Hermosa, Inc., produces one model of mountain bike. Partial information for the company follows:
| Number of bikes produced and sold | 490 | 830 | 970 | |||
| Total costs | ||||||
| Variable costs | $ | 113,190 | $ | ? | $ | ? |
| Fixed costs per year | ? | ? | ? | |||
| Total costs | ? | ? | ? | |||
| Cost per unit | ||||||
| Variable cost per unit | ? | ? | ? | |||
| Fixed cost per unit | ? | ? | ? | |||
| Total cost per unit | ? | $ | 507.75 | ? | ||
Required:
1. Complete the table.
2. Calculate Hermosa’s contribution margin ratio and its total contribution margin at each sales level indicated in the table assuming the company sells each bike for $730.
4. Calculate Hermosa’s break-even point in units and sales revenue.
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