PA6-1 (Algo) Calculating Contribution Margin, Contribution Margin Ratio, Break-Even Point [LO 6-1, 6-2] Hermosa, Incorporated produces one model of mountain bike. Partial information for the company follows: Number of bikes produced and sold Total costs Variable costs Fixed costs per year Total costs Cost per unit Variable cost per unit Fixed cost per unit Total cost per unit Required: 1. Complete the table. 500 840 920 $ 118,000 $ 7 $ 7 ? 7 ? ? 7 ? ? ? ? $ 517.75 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 $670. 4. Calculate Hermosa's break-even point in units and sales revenue.
PA6-1 (Algo) Calculating Contribution Margin, Contribution Margin Ratio, Break-Even Point [LO 6-1, 6-2] Hermosa, Incorporated produces one model of mountain bike. Partial information for the company follows: Number of bikes produced and sold Total costs Variable costs Fixed costs per year Total costs Cost per unit Variable cost per unit Fixed cost per unit Total cost per unit Required: 1. Complete the table. 500 840 920 $ 118,000 $ 7 $ 7 ? 7 ? ? 7 ? ? ? ? $ 517.75 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 $670. 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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Transcribed Image Text:PA6-1 (Algo) Calculating Contribution Margin, Contribution Margin Ratio, Break-Even Point [LO 6-1, 6-2)
Hermosa, Incorporated produces one model of mountain bike. Partial information for the company follows:
Number of bikes produced and sold
Total costs
Variable costs
Fixed costs per year
Total costs
Cost per unit
Variable cost per unit
Fixed cost per unit
Total cost per unit
Required:
1. Complete the table.
500
840
920
$ 118,000
$ 7
?
7
$ 7
?
7
?
?
7
$ 517.75
?
?
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 $670.
4. Calculate Hermosa's break-even point in units and sales revenue.
Complete this question by entering your answers in the tabs below.
Required 1
Required 2 Required 4
Complete the table.
Note: Round your "Cost per Unit" answers to 2 decimal places.
Number of bikes produced and sold
Total costs
Variable costs
Fixed costs per year
Total costs
Cost per unit
Variable cost per unit
Fixed cost per unit
Total cost per unit
500 Units
840 Units
920 Units
$
118,000
$
118,000 $
0 $
$
0.00
$
517.75 $
0.00
Required 1
Required 2 >
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