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 $630. 3. Calculate net operating income (loss) at each of the sales levels assuming a sales price of $630. 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 910 Units 1,328 Units $ 180,000 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 $ 533.00

Answer 1

1
Bikes produced and sold	720 units	910 units	1328 units
Total costs
Variable costs	182500	202500	345000
Fixed costs per year	257530	257530	257530
Total costs	440030	460030	602530
Cost per unit
Variable cost per unit	250.00	250.00	250.00
Fixed cost per unit	357.68	283.00	193.92
Total Cost per unit	607.68	533.00	443.92
2
	720 units	910 units	1328 units
Total Contribution margin	273600	345800	504640
Contribution margin ratio	60.32%	60.32%	60.32%
3
	720 units	910 units	1328 units
Net Operating income	16070	88270	247110
Workings:
Variable cost per unit	250.00	=180000/720
Fixed costs per year	257530	=910*(533-250)
	720 units	910 units	1328 units
Total Contribution margin	=720*(630-250)	=910*(630-250)	=1328*(630-250)
Contribution margin ratio	60.32%	=(630-250)/630
	720 units	910 units	1328 units
Net Operating income	=273600-257530	=345800-257530	=504640-257530