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.) 730 Units 770 Units 1,830 Units $ 182,500 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 $ 540.00

Answer 1

Required 1
	Bikes Produced and Sold		730 Units		770 Units		1830 Units
	Total Costs
	Variable Costs		$182,500.00		$192,500.00		$457,500.00
	Fixed Costs		$223,300.00		$223,300.00		$223,300.00
	Total Costs		$405,800.00		$415,800.00		$680,800.00
	Cost Per Unit
	Variable Costs per unit		$250.00		$250.00		$250.00
	Fixed Costs Per unit		$305.89		$290.00		$122.02
	Total Cost Per Unit		$555.89		$540.00		$372.02
Required 2
	Sales Price		$630.00		$630.00		$630.00
	Total Sales	A	$459,900.00		$485,100.00		$1,152,900.00
	Total Variable Costs	B	$182,500.00		$192,500.00		$457,500.00
	Contribution Margin	C=A-B	$277,400.00		$292,600.00		$695,400.00
	Contribution Margin Ratio	C/A	60.32%		60.32%		60.32%
Required 3
	Contribution Margin	A	$277,400.00		$292,600.00		$695,400.00
	Fixed Costs	B	$223,300.00		$223,300.00		$223,300.00
	Net Operating Income	C=A-B	$54,100.00		$69,300.00		$472,100.00

Note 1	Variable Cost per unit (730 Units)			$182,500	=	$250.00
				730 units
Note 2	Fixed Cost per unit (770 Units)			$540(total) - $250 (Variable)	=	$290.00
Note 3	Fixed Cost (770 Units)			$290*770	=	$223,300.00
Note 4	Variable Cost (770 Units)			$250*770	=	$192,500.00
Note 5	Fixed Cost per unit (730 Units)			$223,300	=	$305.89
				730 units
Note 6	Variable Cost (1830 Units)			$250*1830 units	=	$457,500.00
Note 7	Fixed Cost (1830 units)				=	$223,300.00
Note 8	Fixed Cost per unit (1830 Units)			$223,300	=	$122.02
				1830 units