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Please answer the question below! Thanks! Tim's Bicycle Shop sells 21-speed bicycles. For purposes of a cost-volume-profit analysis, the shop owner has divided sales into
Please answer the question below! Thanks!
Tim's Bicycle Shop sells 21-speed bicycles. For purposes of a cost-volume-profit analysis, the shop owner has divided sales into two categories, as follows Product Type High-quality Medium-quality Sales Invoice Price $500 Cost $275 135 Sales Commission $25 15 300 Three-quarters of the shop's sales are medium-quality bikes. The shop's annual fixed expenses are $65,000. (In the following requirements, ignore income taxes.) Required: 1. Compute the unit contribution margin for each product type 2. What is the shop's sales mix? 3. Compute the weighted-average unit contribution margin, assuming a constant sales mix. 4. What is the shop's break-even sales volume in dollars? Assume a constant sales mix 5. How many bicycles of each type must be sold to earn a target net income of $48,750? Assume a constant sales mixStep by Step Solution
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