Question
Scooters plans to sell a standard scooter for $ 120 and a chrome scooter for $ 160. Steve's purchases the standard scooter for $ 30
Scooters plans to sell a standard scooter for $ 120 and a chrome scooter for $ 160. Steve's purchases the standard scooter for $ 30 and the chrome scooter for $ 40. Steve's expects to sell one standard scooter for every three chrome scooters. Steve's monthly fixed costs are $ 85,500.
1. How many of each type of scooter must Steve's Scooters sell each month to break even?
(Fixed costs + Target profit)/ Weighted-avg. CM per unit = Required sales in units
Standard Scooter formula: ______+_____/_____= required sales in units
Chrome Scooter formula: ______+_____/_____= required sales in units
Stevie's must sell ____ standard scooters and _____ Chrome scooters to break even.
2. How many of each type of scooter must Steve's Scooters sell each month to earn $ 67,500?
Standard Scooter formula: ______+_____/_____= required sales in units
Chrome Scooter formula: ______+_____/_____= required sales in units
Stevie's must sell ____ standard scooters and _____ Chrome scooters.
3. Suppose Steve's expectation to sell one standard scooter for every three chrome scooters was incorrect and for every four scooters sold two are standard scooters and two are chrome scooters. Will the breakeven point of total scooters increase or decrease? Why? (Calculation not required.)
Each standard scooter contributes $____ to profits while each chrome scooter contributes$_____ to profit.Therefore, the increase in sales of standard scooters and decrease in chrome scooters woud cause the weighted average contribution margin to _______ and the break even point to _______.
I am stuck at how to find the weighted-avg. CM per unit.
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