Barclay Bikes manufactures and sells three distinct styles of bicycles: the Youth model sells for $380 and has a unit contribution margin of $145; the Adult model sells for $930 and has a unit contribution margin of $490; and the Recreational model sells for $1,080 and has a unit contribution margin of $540. The company's sales mix includes: 5 Youth models; 9 Adult models; and 6 Recreational models. If the firm's annual fixed costs total $6,580,000, calculate the firm's contribution margin per composite unit.

Multiple Choice

• $2,270.

• $8,375.

• $725.

• $1,295.

• $1,455.

Forrester Company is considering buying new equipment that would increase monthly fixed costs from $180,000 to $612,000 and would decrease the current variable costs of $90 by $30 per unit. The selling price of $120 is not expected to change. Forrester's current break-even sales are $720,000 and current break-even units are 6,000. If Forrester purchases this new equipment, the revised break-even point in dollars would be:

Multiple Choice

• $1,080,000.

• $1,224,000.

• $360,000.

• $720,000.

• $300,000.