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Leisure Ltd produces two types of bicycles, the leisure bicycle and the mountain bicycle. The leisure bike is a popular family bicycle, while the mountain

Leisure Ltd produces two types of bicycles, the leisure bicycle and the mountain bicycle. The leisure bike is a popular family bicycle, while the mountain bike is an all-terrain bicycle popular with sportspeople, Data relating to the two bicycles is as follows:
Selling price per unit Variable
(R)
Leisure bicycle 1000
manufacturing cost per unit (R)
Mountain bicycle2200
450
1210
Required:
Sales representatives receive a commission of 5% on the mountain bike and a 3% commission on the leisure bike. Annual fixed costs total R180000. The company has recently embarked on a marketing campaign of 'carfree living', which has seen the sale of its leisure bikes increase dramatically, with 80% of the company's sales coming from the leisure bicycle.
Calculate the contribution per unit for each bicycle.
Assuming a constant sales mix, calculate:
(I) The weighted average contribution per unit (il) The weighted average contribution margin ratio (ill) The breakeven point in rands
(iv) The number of leisure and mountain bikes that must be sold in order to generate an after-target profit of R500000(assume a tax rate of 30%).
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