Pro Bike manufactures and sells two types of bikes: road bikes and mountain bikes. The company sold 600 units of each type of bike during the year.

a. Compute contribution margin (in dollars) for each product.
b. Compute contribution margin ratio for each product. Which product has the better contribution margin ratio?

Transcribed Image Text:

Per unit Sales price..... Variable cost of goods sold.. Variable selling and administrative expenses.. Road bikes $1,200 840 60 Mountain bikes $800 480 64