Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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-

image text in transcribed

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?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

College Accounting Chapters 1-15

Authors: James Heintz

21st Edition

1285624815, 9781285624815

More Books

Students also viewed these Accounting questions

Question

b. Construct NPV profiles for Projects A and B.

Answered: 1 week ago

Question

When should you avoid using exhaust brake select all that apply

Answered: 1 week ago