Speedy Bikes, Inc. manufactures bicycles. Because it implemented lean production methods, it holds zero inventory...
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Speedy Bikes, Inc. manufactures bicycles. Because it implemented lean production methods, it holds zero inventory at the end of each month. it is curently operating at 75% of capacity, producing and seling 10,000 bicycles per year. Financial data for its most recent fiscal year folows. Revenue= $3,500,000 Less: Costs (alphabetical order) CEO Salary= 150,000 Direct labor= 270,000 Factory rent= 400,000 Factory supervisor salaries= 220,000 Plant &machine depreciation= 720,000 Plant utilities (all variable)= 80,000 Radio advertising= 370,000 Raw materials= 450,000 Sales commissions= 110,000 Total Cost= 2,770,000 Net Operating Income= $730,000
Please show work so i can learn how to do this.
1. Compute the total manufacturing cost per unit.
2. Compute the gross margin per unit
3. Compute the contribution margin per unit
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