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Racing Bicycle Company For the Month of June Total Sales (600 bicycles) $ 300,000 Less: Variable expenses 180,000 I Less: Fixed expenses 90,000 1-
Racing Bicycle Company For the Month of June Total Sales (600 bicycles) $ 300,000 Less: Variable expenses 180,000 I Less: Fixed expenses 90,000 1- Provide Contribution Income Statement for RBC. 2- What is the profit impact if Racing Bicycle can increase unit sales from 600 to 640 by increasing the monthly advertising budget by $12,000? 3- What is the profit impact if Racing Bicycle can use higher quality raw materials, thus increasing variable costs per unit by $12, to generate an increase in unit sales from 600 to 680? 4- What is the profit impact if RBC: (1) cuts its selling price $30 per unit, (2) increases its advertising budget by $15,000 per month, and (3) increases sales from 600 to 750 units per month? 5- What is the profit impact if RBC: (1) pays a $ 20 sales commission per bike sold instead of paying salespersons flat salaries that currently total $6,500 per month, and (2) increases unit sales from 600 to 675 bikes? 6- If RBC has an opportunity to sell 160 bikes to a wholesaler without disturbing sales to other customers or fixed expenses, what price would it quote to the wholesaler if it wants to increase monthly profits by $4,000?
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