Per Unit	600 Bikes	600 bikes + advertising	600 bikes + advertising + price reduction
Sales	$800
Variable Costs	$500
Contriubution Margin
Fixed Costs	$80,000
Operating Income

1) Consider the following inforamtion developed by the accountant at CyclCo, a bike retailer

a) What is the contribution margin per bike?

b) What is the break-even point (in units)?

c) What is the break-even point (in dollars)?

d) How much operating profit would CyclCo earn if they sold 600 bikes?

e) Assuming CyclCo's currently sells 600 bikes, should they spend $18,000 in advertising to increase sales by 12%?

f) Now, in consideration with the advertising, CyclCo is considering a 15% price reduction that will increase total sales by 30%. What is the income effect; would you consider combining both advertising and price reduction?

Fill in the table