Question
Stewart's Scooters plans to sell a standard scooter for $300 and a chrome scooter for $320. Stewart's purchases the standard scooter for $150 and
Stewart's Scooters plans to sell a standard scooter for $300 and a chrome scooter for $320. Stewart's purchases the standard scooter for $150 and the chrome scooter for $80. Stewart's expects to sell one standard scooter for every three chrome scooters. Stewart's monthly fixed costs are $139,200. Requirement 1. How many of each type of scooter must Steve's Scooters sell each month to break even? Start by selecting the formula and entering the amounts to compute the breakeven point in units for the "package" of products-total scooters to be sold. (Enter a "0" for any zero balances. Enter currency amounts to the nearest cent. Abbreviation used: Weighted-avg. CM = weighted-average contribution margin.) ( $ Target profit 0 Fixed costs Weighted-avg. CM per unit Required sales in units How many of each type of scooter must Steve's Scooters sell each month to break even? Steve's must sell standard scooters and chrome scooters to break even. How many of each type of scooter must Stewart's Scooters sell each month t earn $391,500? Fixed costs ( Target profit | Weighted-avg. CM per unit Required sales in units To reach the target operating income, Steve's must sell standard scooters and chrome scooters. Requirement 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 profits while each chrome scooter contributes to profits. Therefore, the increase in sales of standard scooters and decrease in sales of chrome scooters would cause the weighted-average contribution margin to decrease and the breakeven point to increase
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