Hermosa, Inc., produces one model of mountain bike. Partial information for the company follows:
Number of bikes produced and sold
500
800
1,000
Total costs
Variable costs
$
118,000
$
?
$
?
Fixed costs per year
?
?
?
Total costs
?
?
?
Cost per unit
Variable cost per unit
?
?
?
Fixed cost per unit
?
?
?
Total cost per unit
?
$
513.75
?
Required:1. Complete the table.
2. Calculate Hermosas contribution margin ratio and its total contribution margin at each sales level indicated in the table assuming the company sells each bike for $650.
4. Calculate Hermosas 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. (Round your "Cost per Unit" answers to 2 decimal places.)
Number of bikes produced and sold
500 Units
800 Units
1000 Units
Total costs
Variable costs
$118,000
Fixed costs per year
Total costs
Cost per unit
Variable cost per unit
Fixed cost per unit
Total cost per unit
$513.75
Required 2
Calculate Hermosas contribution margin ratio and its total contribution margin at each sales level indicated in the table assuming the company sells each bike for $650. (Round your percentage answers to 2 decimal places. (i.e. .1234 should be entered as 12.34%.))
500 Units
800 Units
1000 Units
Contribution Margin Ratio
%
%
%
Total Contribution Margin
Required 4
Calculate Hermosas break-even point in units and sales revenue. (Round your "Unit" and "Sales Revenue" answers to the nearest whole number.)
Break-Even Units
Bikes
Break-Even Sales Revenue
Answer & Explanation
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