Complete Presidio’s cost data table. (Round your Cost per Unit answers to 2 deci

Question

Complete Presidio’s cost data table. (Round your Cost per Unit answers to 2 decimal places.)

Calculate Presidio’s contribution margin ratio and its total contribution margin at each sales level indicated in the cost data table assuming the company sells each bike for $650. (Round your Margin Ratio answers to 2 decimal places.)

Calculate net operating income at each of the sales levels assuming a sales price of $650.

Explanation / Answer

1 Complete Presidio’s cost data table. (Round your Cost per Unit answers to 2 decimal places.) Bike Produced and Sold 625 Units 800 Units 1050 Units Total Costs Variable Costs 125000 160000 210000 Fixed costs per year 275000 275000 275000 Total Costs 400000 435000 485000 Cost per Unit 640 543.75 461.90 Variable cost per unit 200 200 200 fixed cost per unit 440 343.75 261.90 Total cost per unit 640 543.75 461.90 Working Notes 1 Variable cost per unit is 125,000/ 625 =200 2 Variable cost per unit is same for all activity level 3 Fixed cost per unit at 800 units level is 543.75- 200 = 343.75 4 Total Fixed cost at 800 unit leve is 800 x 343.75 = 275000 5 It is assumed that total fixed cost remains same for all unit level 2 Calculate Presidio’s contribution margin ratio and its total contribution margin at each sales level indicated in the cost data table assuming the company sells each bike for $650. (Round your Margin Ratio answers to 2 decimal places.) 625 units 800 units 1050 units Total contribution margin $          2,81,250 $        3,60,000 $                     4,72,500 contribution margin ratio 69.23% 69.23% 69.23% Total Contribution Margin (selling price per unit x no.of units)- (Variable cost per unit x number of units) Contribution Margin Ratio (Sales - Variable expenses)/ sales Note: Though Total contribution margin will be different for each unit level, the contribution margin ratio will be same so long as selling price and variable cost per unit do not change at different activity level 3 Calculate net operating income at each of the sales levels assuming a sales price of $650. 625 units 800 units 1050 units Sales $          4,06,250 $        5,20,000 $                     6,82,500 Variable Cost $          1,25,000 $        1,60,000 $                     2,10,000 Contribution $              2,81,250 $            3,60,000 $                            4,72,500 Fixed Cost $              2,75,000 $            2,75,000 $                            2,75,000 Net Operating Income $                    6,250 $                85,000 $                            1,97,500

Related Questions

Navigate

• Browse (All)
• Browse C
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.