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Roys's Bikes - Multiple Product CVP Roy's Bikes manufactures two different mountain bicycles: with a midframe shock (soft tail) and without a midframe shock (hard
Roys's Bikes - Multiple Product CVP Roy's Bikes manufactures two different mountain bicycles: with a midframe shock (soft tail) and without a midframe shock (hard tail). The following information is available for each bicycle. Hard tail $1,400 $800 Sales price/bicycle Variable cost/bicycle Soft tail $2,800 $2,000 The company's fixed costs are $1,200,000. An analysis of the sales mix indicates that hard tail bicycles will make up 80% of the total bicycles sold. a) Determine the break-even point in bicycles for Roy's and identify how many bicycles of each type will be sold at the break-even point. Verify your answer with a contribution format income statement. Be sure to clearly show computations. b) Assume the sales mix changes and hard tail bikes will make up 60% of total bicycles sold. Determine the new break-even point and identify how many bicycles of each type will be sold at the break-even point. Verify your answer with a contribution format income statement. Be sure to clearly show computations
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