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Question 6 Loud Noise Limited presently produces bikes and treadmills for the Indonesian and Chilean markets but is looking to expand to cover a greater
Question 6 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 Variable Manufacturing Overhead (per unit) $41.00 $26.00 Variable Selling Expense (per unit) $26.00 $19.00 Fixed Manufacturing Overhead (total) $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 $6,000,000. 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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