(SOLVED) Racing Wheels Bicycle Shop sells racing bicycles For the purposes


Question Description:

$20

Racing Wheels Bicycle Shop sells racing bicycles. For the purposes of a cost volume profit analysis, the shop owner has divided sales into two categories, as follows
Three-quarters of the shop’s sales are mountain bikes. The shop’s annual fixed costs are $390
(In the following requirements, ignore income taxes.)
Required:
1. Calculate the unit contribution margin for each product type
2. What is the shop’s sales mix?
3. Calculate 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 profit of $409 500? Assume a constant sales mix

Answer

$20