Question

Presidio, Inc., produces one model of mountain bike. Partial information for the company follows: Required: 1. Complete Presidio's cost data table. 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 $620. 3. Calculate net operating income (loss) at each of the sales levels assuming a sales price of $620. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Complete Presidio's cost data table. (Round your Cost per Unit answers to 2 decimal places.) 720 Units 810 Units 1,580 Units $ 187,200 187,200 $ Bikes Produced and Sold Total costs Variable costs Fixed costs per year Total costs Cost per unit Variable cost per unit Fixed cost per unit Total cost per unit 0 0.00 $ 531.00 $

Answer 1

1.
Bikes produced and Sold	720 units	810 units	1580 units
Total cost
Variable costs	187200	210600 [ 260 * 810 ]	410800 [ 260 * 1580 ]
Fixed costs per year	219510	219510 [ 271 * 810 ]	219510
Total costs	406710	430110	630310
Cost per unit
variable cost per unit	260 [ 187200/720 ]	260	260
Fixed cost per unit	304.88 [ 219510 / 720 ]	271 [ 531 - 260 ]	138.93 [ 219510 / 1580 ]
Total cost per unit	564.88	531	398.93

2.
	720 units	810 units	1580 units
Total contribution margin ( Sales - Total variable cost )	259200	291600	568800
Contribution margin ratio ( Total contribution margin / Sales )	58.06%	58.06%	58.06%
Working note :
	720 units	810 units	1580 units
Sales ( Units * Selling price )	446400	502200	979600

3.
	720 units	810 units	1580 units
Total contribution margin	259200	291600	568800
(-) Fixed cost per year	219510	219510	219510
Net operating income	39690	72090	349290