E7-29A Find breakeven for a multiproduct firm (Learning Objective 4)

Rapid Scooters plans to sell a motorized standard scooter for $60 and a motorized chrome

scooter for $75. Rapid Scooters purchases the standard scooter for $45 and the chrome scooter

for $55. Rapid Scooters expects to sell two chrome scooters for every three standard scooters.

The company's monthly fixed expenses are $18,700. How many of each type of scooter must

Rapid Scooters sell monthly to breakeven? To earn $13,600?

E7-30A Work backward to find missing data (Learning Objective 4)

Bradley Manufacturing manufactures two styles of watchesthe Digital and the Classic.

The following data pertain to the Digital:

Variable manufacturing cost......................................................................................... $125

Variable operating cost................................................................................................ $ 35

Sale price...................................................................................................................... $225

M07_BRAU9426_04_SE_CH07.indd 442 4/1/14 11:24 AM

Bradley's monthly fixed expenses total $195,000. When Digitals and Classics are sold in

the mix of 7:3, respectively, the sale of 2,100 total watches results in an operating income

of $36,000. Compute the contribution margin per watch for the Classic.