Question

# Hermosa, Inc., produces one model of mountain bike. Partial information for the company follows: Number of...

Hermosa, Inc., produces one model of mountain bike. Partial information for the company follows: Number of bikes produced and sold 480 820 970 Total costs Variable costs \$ 115,680 \$ ? \$ ? Fixed costs per year ? ? ? Total costs ? ? ? Cost per unit Variable cost per unit ? ? ? Fixed cost per unit ? ? ? Total cost per unit ? \$ 534.75 ? Required: 1. Complete the table. (Round your "Cost per Unit" answers to 2 decimal places.) 2. Calculate Hermosa’s contribution margin ratio and its total contribution margin at each sales level indicated in the table assuming the company sells each bike for \$800. (Round your percentage answers to 2 decimal places. (i.e. .1234 should be entered as 12.34%.)) 4. Calculate Hermosa’s break-even point in units and sales revenue. (Round your answers to the nearest whole number.) ReferenceseBook & Resources

 Number of Bikes Produced 480 820 970 Total Costs Variable Costs \$115,680.00 \$197,620.00 \$233,770.00 Fixed Costs Per Year \$240,875.00 \$240,875.00 \$240,875.00 Total Costs \$356,555.00 \$438,495.00 \$474,645.00 Cost Per Unit Variable Cost Per Unit \$241.00 \$241.00 \$241.00 Fixed Cost Per Unit \$501.82 \$293.75 \$248.32 Total Cost Per Unit \$742.82 \$534.75 \$489.32 2 480 820 970 Contribution Margin Ratio 69.88% 69.88% 69.88% Total Contribution Margin 268320 458380 542230 3 Break Even Units =240875/(800-241)= 431 Sales Revenue =240875/69.88%= \$344698 or \$344723

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