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Case 2 (20 Marks) Redfern Bicycles International Pty Ltd produces and sells three different types of mountain bikes. Information regarding the three models is shown
Case 2 (20 Marks) Redfern Bicycles International Pty Ltd produces and sells three different types of mountain bikes. Information regarding the three models is shown below. Cross country Trail Bike (TB) Downhill (DH) Total (XC) Unit sold 5,000 units 10,000 units 25,000 units 40,000 units Selling price $800 $500 $350 Variable cost $500 $300 $250 The company's total fixed costs to produce the bicycles are $7,500,000. a) Determine and explain the sales mix as a function of units sold for the three products (5 Marks). b) Determine and explain the weighted-average unit contribution margin (5 Marks). c) Determine and explain the total number of units that the company must produce to break even (5 Marks). d) Determine and explain the number of units of each model that the company must produce to break even
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