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2) Racing Bicycle Company Contribution Income Statement For the Month of June Sales (500 bicycles) Less: Variable expenses Contribution margin $ 250,000 150,000 100,000
2) Racing Bicycle Company Contribution Income Statement For the Month of June Sales (500 bicycles) Less: Variable expenses Contribution margin $ 250,000 150,000 100,000 Less: Fixed expenses 80,000 Net operating income $ 20,000 a) What is RBC's Contribution Margin (CM) per unit? b) What is RBC's CM Ratio? c) What is RBC's Break-even point in Units? d) What is RBC's Break-even point in Dollars? e) What would RBC's Net Operating Income be if they sell 430 bicycles? f) What is the profit impact if RBC can increase unit sales from 500 to 540 by increasing the monthly advertising budget by $10,000? g) What is the profit impact if RBC can use higher quality raw materials, thus increasing variable costs per unit by $10, to generate an increase in unit sales from 500 to 580?
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