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Problem - Predicting Cost Behavior, Calculating Contribution Margin and Contribution Margin Ratio, Calculating Profit
Presidio, Inc. produces one model of mountain bike. Partial information for the company follows: Bikes Cost per Unit: 625 800 1050
Bikes Produced and Sold 625 Units 800 Units 1,050 Units
Total costs
Variable costs $125,000
Fixed costs per year
Cost per unit
Variable cost per unit
Fixed cost per unit
Total cost per unit $543.75
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 $650.
3. Calculate net operating income at each of the sales levels assuming a sales price of $650.
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