QUICILIU JITUULL e Analysis (33 marks) 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 470 6 Average selling price per bike $365.00 7 Purchase cost (COGS) per bike $ 149.00 8 Assembly cost per bike $ 60.00 9 Sales clerks required - seasonal 2 10 Monthly Salary per Sales Clerk $ 1,393 11 Sales commissions 13% 12 Advertising campaign (annual cost) $ 5,602 13 14 The additional sales clerks required for the BMX line will only work for four months of the year (May to 15 Required: Part A (Chapter 6) (13 marks): Prepare a CVP income statement (for a one year period) to determine the segment margin for the new BMX kes product line. 16 17 BMX Product Line Budgeted CVP Income Statement 18 For the year ended December 31, 2020 19 TOTAL Per Bike Percentage 20 Number of Bikes 470 A Case Intro Group Members Q1 Q2 Q3 04 05 06 + 18 19 BMX Product Line Budgeted CVP Income Statement For the year ended December 31, 2020 TOTAL Per Bike Percentage 20 Number of Bikes 470 21 Sales Revenue 100% 22 Less: Variable Costs (must be listed alphabetically) 23 24 25 26 Total Variable Costs 27 28 Less: Fixed Costs (must be listed alphabetically) 29 30 31 Total Fixed Cost 32 BMX SEGMENT MARGIN 33 34 Required Part B (Chapter 6 & 7) (8 marks)