Hermosa, Inc., produces one model of mountain bike. Partial information for the company follows: Number of bikes produced and sold 490 830 970Total costs Variable costs$113,190$?$?Fixed costs per year ? ? ?Total costs ? ? ?Cost per unit Variable cost per unit ? ? ?Fixed cost per unit ? ? ?Total cost per unit ?$507.75 ? Required:1. Complete the table.2. Calculate Hermosa’s contribution margin ratio and its total contribution margin at each sales level indicated in the table assuming the company sells each bike for $730.4. Calculate Hermosa’s break-even point in units and sales revenue.

1. Following is the complete table:

Answered: Hermosa, Inc., produces one model of…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Hermosa, Inc., produces one model of mountain bike. Partial information for the company follows:


Number of bikes produced and sold		490		830		970
Total costs
Variable costs	$	113,190	$	?	$	?
Fixed costs per year		?		?		?
Total costs		?		?		?
Cost per unit
Variable cost per unit		?		?		?
Fixed cost per unit		?		?		?
Total cost per unit		?	$	507.75		?

Required:
1. Complete the table.

2. Calculate Hermosa’s contribution margin ratio and its total contribution margin at each sales level indicated in the table assuming the company sells each bike for $730.

4. Calculate Hermosa’s break-even point in units and sales revenue.

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