Bikes Manufacturing produces and sells childrens bikes at an average price of $60. Its costs are as
Question:
Bikes Manufacturing produces and sells children’s bikes at an average price of $60. Its costs are as follows: direct materials, $12; direct labour, $7; variable overhead, $3; sales commission, 5% of price. Its fixed monthly costs are $38,000.
Required:
1. Using the above cost data, set up a monthly cost equation.
2. What is the company’s contribution margin percentage?
Contribution MarginContribution margin is an important element of cost volume profit analysis that managers carry out to assess the maximum number of units that are required to be at the breakeven point. Contribution margin is the profit before fixed cost and taxes...
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1 The companys variable cost per unit would be DM DL VOH Sales commis...View the full answer
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Related Book For
Introduction to Managerial Accounting
ISBN: 978-1259105708
5th Canadian edition
Authors: Peter C. Brewer, Ray H. Garrison, Eric Noreen, Suresh Kalagnanam, Ganesh Vaidyanathan
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