6. Pedal Limited is a multiproduct bicycle manufacturer. The following information is available about the companys products:

Mountain Bikes Road Bikes Commuting Bikes

Sales 120,000 420,000 360,000

Variable costs 64,000 220,000 140,000

Contribution Margin 56,000 200,000 220,000

Direct Fixed Costs 45,000 70,000 90,000

Allocated indirect fixed costs 20,000 70,000 60,000

Operating Profit (9,000) 60,000 70,000

i. Pedal Limited currently sells 500 road bikes. What is the breakeven sales volume for road bikes (3 Marks)

ii. Pedal Limited has struck up a valuable relationship with a prominent social media influencer who is willing to promote sales of one of Pedals products. Which product should be given to the influencer to promote? Explain why. (3 Marks)

iii. If Mountain Bikes are discontinued what will be the impact on Pedals operating profit? (3 marks)