Parker, Incorporated produces one model of mountain bike. Partial information for the company follows: Complete the template worksheet filling in all of the following: 1. Total variable costs for each sales level 2. Total fixed costs for each sales level 3. Total costs for each sales level 4. Variable cost per unit for each sales level 5. Fixed cost per unit for each sales level 6. Total cost per unit for each sales level 7. Contribution margin ratio for each sales level, using a sales price of 710 per unit. 8. Total contribution margin for each sales level 9. Breakeven units 10. Breakeven sales revenue 11. Prepare the GAAP (absorption costing) income statement if selling, general, and administrative costs are $30,000. Recall that you have already solved for total costs, previously. 12. How many units should Parker, Inc sell AND what should the sales revenue be in order to earn a profit of $220,000? Sales Price ? Number of bikes produced and sold 500 750 960 Total costs Variable costs 116,000.00 ? ? Fixed costs per year ? ? ? Total costs ? ? ? Cost per unit Variable cost per unit ? ? ? Fixed cost per unit ? ? ? Total cost per unit ? 519.75 ? Contribution Margins 500 750 960 Contribution Margin Ratio ? ? ? Total Contribution Margin ? ? ? Break-even Analysis Units ? Sales revenue ? Income Statement Units 500 750 960 Sales revenue ? ? ? Cost of goods sold ? ? ? Gross profit ? ? ? Selling, general, & administrative expenses ? ? ? Net operating income (loss) ? ? ? Target Profit of 220,000.00 Units ? Sales revenue ?

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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Parker, Incorporated produces one model of mountain bike. Partial information for the company follows:

Complete the template worksheet filling in all of the following:

1. Total variable costs for each sales level
2. Total fixed costs for each sales level
3. Total costs for each sales level
4. Variable cost per unit for each sales level
5. Fixed cost per unit for each sales level
6. Total cost per unit for each sales level
7. Contribution margin ratio for each sales level, using a sales price of 710 per unit.
8. Total contribution margin for each sales level
9. Breakeven units
10. Breakeven sales revenue
11. Prepare the GAAP (absorption costing) income statement if selling, general, and administrative costs are $30,000. Recall that you have already solved for total costs, previously.
12. How many units should Parker, Inc sell AND what should the sales revenue be in order to earn a profit of $220,000?

Sales Price	?

Number of bikes produced and sold	500	750	960
Total costs
Variable costs	116,000.00	?	?
Fixed costs per year	?	?	?
Total costs	?	?	?


Cost per unit
Variable cost per unit	?	?	?
Fixed cost per unit	?	?	?
Total cost per unit	?	519.75	?


Contribution Margins	500	750	960
Contribution Margin Ratio	?	?	?
Total Contribution Margin	?	?	?

Break-even Analysis
Units	?
Sales revenue	?


Income Statement
Units	500	750	960

Sales revenue	?	?	?
Cost of goods sold	?	?	?
Gross profit	?	?	?
Selling, general, & administrative expenses	?	?	?
Net operating income (loss)	?	?	?

Target Profit of	220,000.00
Units	?
Sales revenue	?

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