Need help with the second part determining the product cost and eveything else in the second slide

part c needed asap

2 The owners of Mountain Sports Ltd. are currently reviewing a proposal to adopt a new product line - BMX Bicycles. This new product line will be compatible with the Mountain Bikes and open a new target market, younger customers. It is anticipated that the BMX line be introduced next spring 3 4 Management has estimated the following 5 Expected sales in bikes 420 6 Average selling price perbike 352.00 7 Purchase cost(COGS) per bike $ 107.00 Assembly cost perbike $ 55.00 9 Sales derks required seasonal 2 10 Monthly Salary per Sales Clerk S 1,231 11 Sales commissions 15% 12 Advertising campaign (annual cast) 5,939 13 14 The additional sales clerks required for the BMX line wit only work for four months of the year (May to August). 15 Required: Purt Afhapter 6 (13 marks): Prepare a CVP income statement (for a one year period) to determine the segment margin for the new BMX Bikes product line. 16 27 BMX Product Line Budgeted CVP Income Statement 18 For the year ended December 31, 2020 19 TOTAL Per Bike Percentage 20 Number of Bikes 420 21 Sales Revenue 147,540352.00 100% 22 Less: Variable costs must be listed aphabetically 23 Assembly 23.100 $5.00 I6N 24 Cost of Goods Sold 44.940 107 00 25 Sales Commissions 22 176 52.80 15% 26 Total Variable Costs 90 216 21480 6556 27 Contribution Margin 57 52415 137.20 39% 28 Less Fleed Costs must be listed aphabetical 29 Advertising 5,939 30 Salaries 9.848 21 Total Fixed Cost 35,787 12 BMX SEGMENT MARGN 41.837 Assume management has decided to go ahead with offering the BMX product line. The owners of Mountain Sports are concerned about the ability of BMX to cover its fixed costs and provide a good return on investment (ROI). An investment is required for the necessary fixtures, display racks, and inventory. The owners have provided the minimum return on investment below. Use the cost information and unit sales provided in part A above to answer the questions below. 51 52 Suggested selling price $ 352.00 13 Required investment in assets $ 207,000 4 Minimum return on investment 129 ES 56 Calculate the following: Unit product cost (costs incurred to get the bike ready 7 for sale! Total selling & administrative costs (costs that help sell 18 the bike or run the business as a whole 9 Selling & administrative cost per bike Desired return on investment per bike Markup percentage using absorption costing Suggested selling price using absorption costing + is the suggested selling price (noted in part A) sufficient to earn the required return expected by the owners? uu un 4 Management has estimated the following 5 Expected sales in bikes 420 6 Average selling price per bike $ 352.00 7 Purchase cost(COGS per Bike 107.00 8 Assembly cost per bike 55.00 9 Sales derles required - seasonal 10 Monthly Salary per Sales derk $ 1,231 11 Sales commissions 1596 12 Advertising campaign (annual cost) E 5,939 13 11 The additional sales derks required for the BMX line will only work for four months of the year (May to August). IS Required: Part A (Chapter 6) (13 martes): Prepare a CVP income statement (for a one year period to determine the segment mar for the new BMX Bikes product line 36 27 BMX Product Line Budgeted CVP Income Statement 18 For the year ended December 31 2020 19 TOTAL Per Bike Percentage 20 Number of Bikes 420 21 Sales Revenue 147,840 $ 352.00 100% 22 Less: Variable costs must be listed alphabetically, RE Assembly 23,100 55.00 16% cast of Goods Sold 44 940 07:00 sh BOW Sales Commissions 22,176 52.80 15% 26 Total Variable Costs 90216 214.80 61% ZE Contribution Margin 57,624 S 137.20 39% 28 Less: Fixed Costs must be listed alphabetically) 29 Advertising 5,939 30 salaries 9,848 BL Total Fixed Cost 15,787 30 BMX SEGMENT MARGIN 411 8371 33 34 Required Part B (Chapter 6 & 7) (7 marles This new BMX bike product line will create an increase in sales of two departments: Accessories (refer to Q2 segmented Income statement for department Information). However, due to the floor space required for retailing BMX Bikes, management estimates that sales of Mountain Bikes will decrease (hint: remember that variable costs will also change when sales change). 35 36 Increase in Accessories Sales 13% 37 Decrease in Mountain Bikes Sales 895 38 What is the impact to the company's income as a whole if the BMX product line is added (hint: consider the segment margin of the BMX product Inse, and the impact to the other product lines. Remember that I sales change for a product line the total variable costs will also change. Thus, contribution margin should be used in your calculations for the other product 39 lines) HO 41 Increase in BMX Serment Margin 41,837 20552 19.833 $42 556 Increase Yes 12 Increase in Contribution Margin Accessories Decrease in Contribution Margin Mountain Bikes 13 (show as negative number) 44 NET Increase Decrease) in Operating Income 15 16 DECISION: Should the company add the BMX bike product line? 12 ME Why or why not? Despite the BMX product line reducing the contribution margin of the mountain bike line, there is a significant increase in earnings from the BMX segment and and increase in accessories accounts for 19 the loss insatsstrom the mountainbike 50 RA Required Part C: Pricing (Chapter 9) (9 marks) Assume management has decided to go ahead with offering the BMX product line. The owners of Mountain Sports are concerned about the ability of BMX to cover its fixed costs and provide a good return on investment (ROI). An investment is required for the necessary fixtures, display racks, and inventory. The owners have provided the minimum return on investment below. Use the cost information and unit sales provided in part A above to answer the questions below. 51 S2 Suggested selling price 352.00 53 Required Investment in assets $ 207.000 54 Minimum return on investment 12% 55 56 Calculate the following Unit product cost (costs incurred to get the bike ready 162 57 for sale) Total selling & administrative costs (costs that help ses 37,963 58 the bike or run the business as a whole) 59. Selling & administrative cost per bike 60 Desired return on investment per bike 61 Markuo percentare using abocation costing 62 suggested selling price using absorption costing 63 64 Is the suggested selling price (noted in part A) sufficient to earn the required return expected by the 65 owners? 66 Are there any other considerations management should take into account before adding the product line? 52 58 -9 ECO 2 The owners of Mountain Sports Ltd. are currently reviewing a proposal to adopt a new product line - BMX Bicycles. This new product line will be compatible with the Mountain Bikes and open a new target market, younger customers. It is anticipated that the BMX line be introduced next spring 3 4 Management has estimated the following 5 Expected sales in bikes 420 6 Average selling price perbike 352.00 7 Purchase cost(COGS) per bike $ 107.00 Assembly cost perbike $ 55.00 9 Sales derks required seasonal 2 10 Monthly Salary per Sales Clerk S 1,231 11 Sales commissions 15% 12 Advertising campaign (annual cast) 5,939 13 14 The additional sales clerks required for the BMX line wit only work for four months of the year (May to August). 15 Required: Purt Afhapter 6 (13 marks): Prepare a CVP income statement (for a one year period) to determine the segment margin for the new BMX Bikes product line. 16 27 BMX Product Line Budgeted CVP Income Statement 18 For the year ended December 31, 2020 19 TOTAL Per Bike Percentage 20 Number of Bikes 420 21 Sales Revenue 147,540352.00 100% 22 Less: Variable costs must be listed aphabetically 23 Assembly 23.100 $5.00 I6N 24 Cost of Goods Sold 44.940 107 00 25 Sales Commissions 22 176 52.80 15% 26 Total Variable Costs 90 216 21480 6556 27 Contribution Margin 57 52415 137.20 39% 28 Less Fleed Costs must be listed aphabetical 29 Advertising 5,939 30 Salaries 9.848 21 Total Fixed Cost 35,787 12 BMX SEGMENT MARGN 41.837 Assume management has decided to go ahead with offering the BMX product line. The owners of Mountain Sports are concerned about the ability of BMX to cover its fixed costs and provide a good return on investment (ROI). An investment is required for the necessary fixtures, display racks, and inventory. The owners have provided the minimum return on investment below. Use the cost information and unit sales provided in part A above to answer the questions below. 51 52 Suggested selling price $ 352.00 13 Required investment in assets $ 207,000 4 Minimum return on investment 129 ES 56 Calculate the following: Unit product cost (costs incurred to get the bike ready 7 for sale! Total selling & administrative costs (costs that help sell 18 the bike or run the business as a whole 9 Selling & administrative cost per bike Desired return on investment per bike Markup percentage using absorption costing Suggested selling price using absorption costing + is the suggested selling price (noted in part A) sufficient to earn the required return expected by the owners? uu un 4 Management has estimated the following 5 Expected sales in bikes 420 6 Average selling price per bike $ 352.00 7 Purchase cost(COGS per Bike 107.00 8 Assembly cost per bike 55.00 9 Sales derles required - seasonal 10 Monthly Salary per Sales derk $ 1,231 11 Sales commissions 1596 12 Advertising campaign (annual cost) E 5,939 13 11 The additional sales derks required for the BMX line will only work for four months of the year (May to August). IS Required: Part A (Chapter 6) (13 martes): Prepare a CVP income statement (for a one year period to determine the segment mar for the new BMX Bikes product line 36 27 BMX Product Line Budgeted CVP Income Statement 18 For the year ended December 31 2020 19 TOTAL Per Bike Percentage 20 Number of Bikes 420 21 Sales Revenue 147,840 $ 352.00 100% 22 Less: Variable costs must be listed alphabetically, RE Assembly 23,100 55.00 16% cast of Goods Sold 44 940 07:00 sh BOW Sales Commissions 22,176 52.80 15% 26 Total Variable Costs 90216 214.80 61% ZE Contribution Margin 57,624 S 137.20 39% 28 Less: Fixed Costs must be listed alphabetically) 29 Advertising 5,939 30 salaries 9,848 BL Total Fixed Cost 15,787 30 BMX SEGMENT MARGIN 411 8371 33 34 Required Part B (Chapter 6 & 7) (7 marles This new BMX bike product line will create an increase in sales of two departments: Accessories (refer to Q2 segmented Income statement for department Information). However, due to the floor space required for retailing BMX Bikes, management estimates that sales of Mountain Bikes will decrease (hint: remember that variable costs will also change when sales change). 35 36 Increase in Accessories Sales 13% 37 Decrease in Mountain Bikes Sales 895 38 What is the impact to the company's income as a whole if the BMX product line is added (hint: consider the segment margin of the BMX product Inse, and the impact to the other product lines. Remember that I sales change for a product line the total variable costs will also change. Thus, contribution margin should be used in your calculations for the other product 39 lines) HO 41 Increase in BMX Serment Margin 41,837 20552 19.833 $42 556 Increase Yes 12 Increase in Contribution Margin Accessories Decrease in Contribution Margin Mountain Bikes 13 (show as negative number) 44 NET Increase Decrease) in Operating Income 15 16 DECISION: Should the company add the BMX bike product line? 12 ME Why or why not? Despite the BMX product line reducing the contribution margin of the mountain bike line, there is a significant increase in earnings from the BMX segment and and increase in accessories accounts for 19 the loss insatsstrom the mountainbike 50 RA Required Part C: Pricing (Chapter 9) (9 marks) Assume management has decided to go ahead with offering the BMX product line. The owners of Mountain Sports are concerned about the ability of BMX to cover its fixed costs and provide a good return on investment (ROI). An investment is required for the necessary fixtures, display racks, and inventory. The owners have provided the minimum return on investment below. Use the cost information and unit sales provided in part A above to answer the questions below. 51 S2 Suggested selling price 352.00 53 Required Investment in assets $ 207.000 54 Minimum return on investment 12% 55 56 Calculate the following Unit product cost (costs incurred to get the bike ready 162 57 for sale) Total selling & administrative costs (costs that help ses 37,963 58 the bike or run the business as a whole) 59. Selling & administrative cost per bike 60 Desired return on investment per bike 61 Markuo percentare using abocation costing 62 suggested selling price using absorption costing 63 64 Is the suggested selling price (noted in part A) sufficient to earn the required return expected by the 65 owners? 66 Are there any other considerations management should take into account before adding the product line? 52 58 -9 ECO