In’s Bicycle Shop sells 21 – speed bicycles. For purposes of a cost- volume_profit analysis, the shop owner Has divided sales into two

ategories . as follows :

Sales Price\

Invoice

Sales

Product Type

Cost

Comma = $ 1 on

High – quality

$ 1 , 858

6.840

$ 10 0

Medium- quality

920

62 8

40

Three -quarters of the shop’s sales are medium -quality bikes. The shop’s annual fixed expenses are $2 /0 400’n the following

requirements , ignore income taxes . !`

Required :quot;

1 . Compute the unit contribution margin for each product type

2. What is the shop’s sales mix ?

3 . Compute the weighted-average unit contribution margin , assuming a constant sales mix.

4 . What is the shop’s break – even sales volume in dollars ? Assume a constant sales mix*

5 . How many bicycles of each type must be sold to earn a target net income of $126 7 50 ? Assume a constant sales mixManagerial Accounting