Malverns Bicycle Co is a company that manufactures bicycles. Total Fixed Costs: $1,150,000 Variable Costs:...
50.1K
Verified Solution
Link Copied!
Question
Accounting
Malverns Bicycle Co is a company that manufactures bicycles.
Total Fixed Costs: $1,150,000
Variable Costs: $105/bike
Selling Price: $230/bike
Sales Volume: 14,000
Required:
(a) Discuss the two formats of income statement that can be used for a manufacturing company using the knowledge of gross margin and contribution margin.
(b) Calculate the unit contribution margin and break even points in units.
(c) Calculate the target operating profit.
(d) Calculate the contribution margin ratio and target sales revenue.
(e) Use the Degree of Leverage (DOL) to calculate the new operating profit if sales volume falls by 10%.
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
