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A company manufactures and sells racing bicycles to specialty retailers. The Bomber model sells for $600...

A company manufactures and sells racing bicycles to specialty retailers. The Bomber model sells for $600 and has per-unit variable costs of $300 associated with its production. The company has fixed expenses of $35,000 per month. In May, the company sold 240 of the Bomber model bikes.

A. Calculate the contribution margin per unit for the Bomber.

Contribution margin $____ per unit

B. Calculate the contribution margin ratio of the Bomber.

Contribution margin ratio  %___

C. Prepare a contribution margin income statement for the month of May. Use a minus sign for a net loss if present.

Income Statement
Sales $
Variable Costs
Contribution Margin $
Fixed Costs
Net Income (Loss) $
Business   Accounting   
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Homework Answers

Answer #1
Given that -
Unit sold 240
sales price 600
Variable cost 300
fixed cost 35000
ans A Contribution margin per unit =
sales price - varaible cost = 600-300 = 300
ans B contribution margin ratio= 50%
contribution margin/sales = 300/300
ans C ontribution margin income statement
Income Statement
Sales 144000 600*240
Variable Costs 72000 300*240
Contribution Margin 72000
Fixed Costs 35000
Net Income (Loss) 37000
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