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Loud Noise Limited presently produces bikes and treadmills for the Indonesian and Chilean markets but is looking to expand to cover a greater international range.
Loud Noise Limited presently produces bikes and treadmills for the Indonesian and Chilean markets but is looking to expand to cover a greater international range. The key planned financial information related to the company's key products for 2028 are as follows: Activity Bikes Treadmills Selling Price $250.00 $230.00 Direct Material (per unit) $45.00 $110.00 Direct Labour (per unit) $39.00 $15.00 $41.00 $26.00 Variable Manufacturing Overhead (per unit) Variable Selling Expense (per unit) Fixed Manufacturing Overhead (total) $26.00 $19.00 $1,140,000 $400,000 Fixed Administrative Overhead (total) $560,000 $600,000 Fixed Marketing Overhead(total) $900,000 $850,000 The company has a sales mix ratio of 60% to 40%. The company has estimated that in 2028 they will produce and sell 80,000 total units. Required: 1) Calculate the contribution margin per unit and the contribution ratio for Loud Noise Limited based on production and sales estimates for 2028 and based on the sales mix of 60% to 40%. 2) Calculate the total number of units that are required to be sold in 2028 in order for Loud Noise Limited to breakeven given the 60% to 40% mix ratio. 3) Calculate the total sales revenue Loud Noise Limited would achieve at the breakeven quantity given the 60% to 40% sales mix ratio and projected production and sales estimates for 2028. 4) Assume in 2028 the minimum net income Loud Noise Limited wishes to achieve is 56,000,000. Given the sales mix ratio of 60% to 40%, what is the revenue Loud Noise Limited would generate to ensure achieve the desired minimum net income and the number of bikes and treadmills to be sold
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