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 :
Comma = $ 1 on
High – quality
$ 1 , 858
$ 10 0
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 . !`
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