This part refer to Q 2 segment income statementfor department information

The case figure 3 give a detail how what is the final anawer.

below this the question i neeed answer for and working out for the question

5:30 TEAM 3_Case study 2_ACCTI... Check figures. Question 3 BlX Product Line Budgeted CVP Income Statement For the year ended December 31, 2020 TOTAL Per B Percentage 1004 Sales Revenue Less Vari Costested by Total Variable costs Contribution Margie Less Fred Costs must be listed alphabetically 64.080 13350 34 Total Faxed Cou BMX SEGMENT MARGIN 48138 D E G 390.00 143.00 2 $ 1 Question 3 - Product line Analysis (27 marks) 2 The owners of Mountain Sports Ltd. are currently reviewing a proposal to adopt a new product line - BMX Bicycles. This new product line will be compatible with the Mountain Bikes and open a new target market, younger customers. It is anticipated that the BMX line be introduced next spring 3 4 Management has estimated the following: 5 Expected sales in bikes 480 6 Average selling price per bike $ 7 Purchase cost (COGS) per bike $ 8 Assembly cost per bike $ 55.00 9 Sales clerks required - Seasonal 10 Monthly Salary per Sales Clerk 1,370 11 Sales commissions 15% 12 Advertising campaign (annual cost) $ 4,982 13 14 The additional sales clerks required for the BMX line will only work for four months of the year (May to August). 15 Required: Part A (Chapter 6) (13 marks): Prepare a CVP Income statement (for a one year period) to determine the segment margin for the new BMX Bikes product line. 16 17 BMX Product Line Budgeted CVP Income Statement For the year ended December 31, 2020 TOTAL Per Bike Percentage 20 Number of Bikes 480 18 19 21 ales Revenue 100% 22 Less: Variable Costs must be listed alphabetically) 23 24 25 26 Total Variable Costs 27 28 Less: Fixed Costs (must be listed alphabetically) 29 30 31 Total Fixed Cost 32 33 E G F 33 34 Required Part B (Chapter 6 & 7) (8 marks): This new BMX bike product line will create an increase in sales of two departments: Accessories (refer to Q2 segmented income statement for department information). However, due to the floor space required for retailing BMX Bikes, management estimates that sales of Mountain Bikes will decrease (hint: remember that variable costs will also change when sales change). 35 36 Increase in Accessories Sales 12% 37 Decrease in Mountain Bikes Sales 5% 38 What is the impact to the company's income as a whole of the BMX product line is added (hint: consider the segment margin of the BMX product line, and the impact to the other product lines. Remember that if sales change for a product line, the total variable costs will also change. Thus, contribution margin should be used in your calculations for the other product 39 lines). 40 41 Increase in BMX Segment Margin 42 Increase in Contribution Margin - Accessories Decrease in Contribution Margin - Mountain Bikes 43 (show as negative number) 44 NET Increase (Decrease) in Operating Income 45 46 DECISION: Should the company add the BMX bike product line? 47 48 Why or why not? 49 50 5:28 TEAM 3_Case study 2_ACCTI... : Red Care Chapter 22 marta Amenagement has decided to go ahead without the productie The owner of Mountain Sportare concerned about they of Bito cover isted cats and provide pod retan en Investment RO Antent is required for the necessary for days, and the war provided the minimum return on ment below the the coloration and provide per bento answer the restions below stede 53 5 56 Calculate the following aatai Stop be Derived ambiente Markup stedelicet Is the sweeted selling noted in port Aluficient to the required tuntudy the Are there any other consideration management should take into account before in the product? = Q1 Q2 Q3 04 05 DER BE Check figures - Question 2 TOTAL CONTRIBUTION MARGIN 244711 351% 258511 330% 195535 93.263 900 782.119 40.1% Less Traceable Flised Costs (MUST BE LISTED ALPHABETICALLY) TOTAL Traceable Fleed Costs SEGMENT MARGIN $ 210,711 31135 219.611 Less Common Fixed Costs (MUST BE LISTED ALPHABETICALLY 28.0% 5 179535 47.995 15262 13.155625 119 320 33.0 TOTA. Common FIC OPERATING INCOME 262001 10000 257001 Earings before tres Less Income Tax NETINCOME 64 270 192011 5:30 TEAM 3_Case study 2_ACCTI... Check figures. Question 3 BlX Product Line Budgeted CVP Income Statement For the year ended December 31, 2020 TOTAL Per B Percentage 1004 Sales Revenue Less Vari Costested by Total Variable costs Contribution Margie Less Fred Costs must be listed alphabetically 64.080 13350 34 Total Faxed Cou BMX SEGMENT MARGIN 48138 D E G 390.00 143.00 2 $ 1 Question 3 - Product line Analysis (27 marks) 2 The owners of Mountain Sports Ltd. are currently reviewing a proposal to adopt a new product line - BMX Bicycles. This new product line will be compatible with the Mountain Bikes and open a new target market, younger customers. It is anticipated that the BMX line be introduced next spring 3 4 Management has estimated the following: 5 Expected sales in bikes 480 6 Average selling price per bike $ 7 Purchase cost (COGS) per bike $ 8 Assembly cost per bike $ 55.00 9 Sales clerks required - Seasonal 10 Monthly Salary per Sales Clerk 1,370 11 Sales commissions 15% 12 Advertising campaign (annual cost) $ 4,982 13 14 The additional sales clerks required for the BMX line will only work for four months of the year (May to August). 15 Required: Part A (Chapter 6) (13 marks): Prepare a CVP Income statement (for a one year period) to determine the segment margin for the new BMX Bikes product line. 16 17 BMX Product Line Budgeted CVP Income Statement For the year ended December 31, 2020 TOTAL Per Bike Percentage 20 Number of Bikes 480 18 19 21 ales Revenue 100% 22 Less: Variable Costs must be listed alphabetically) 23 24 25 26 Total Variable Costs 27 28 Less: Fixed Costs (must be listed alphabetically) 29 30 31 Total Fixed Cost 32 33 E G F 33 34 Required Part B (Chapter 6 & 7) (8 marks): This new BMX bike product line will create an increase in sales of two departments: Accessories (refer to Q2 segmented income statement for department information). However, due to the floor space required for retailing BMX Bikes, management estimates that sales of Mountain Bikes will decrease (hint: remember that variable costs will also change when sales change). 35 36 Increase in Accessories Sales 12% 37 Decrease in Mountain Bikes Sales 5% 38 What is the impact to the company's income as a whole of the BMX product line is added (hint: consider the segment margin of the BMX product line, and the impact to the other product lines. Remember that if sales change for a product line, the total variable costs will also change. Thus, contribution margin should be used in your calculations for the other product 39 lines). 40 41 Increase in BMX Segment Margin 42 Increase in Contribution Margin - Accessories Decrease in Contribution Margin - Mountain Bikes 43 (show as negative number) 44 NET Increase (Decrease) in Operating Income 45 46 DECISION: Should the company add the BMX bike product line? 47 48 Why or why not? 49 50 5:28 TEAM 3_Case study 2_ACCTI... : Red Care Chapter 22 marta Amenagement has decided to go ahead without the productie The owner of Mountain Sportare concerned about they of Bito cover isted cats and provide pod retan en Investment RO Antent is required for the necessary for days, and the war provided the minimum return on ment below the the coloration and provide per bento answer the restions below stede 53 5 56 Calculate the following aatai Stop be Derived ambiente Markup stedelicet Is the sweeted selling noted in port Aluficient to the required tuntudy the Are there any other consideration management should take into account before in the product? = Q1 Q2 Q3 04 05 DER BE 5:30 TEAM 3_Case study 2_ACCTI... Check figures. Question 3 BlX Product Line Budgeted CVP Income Statement For the year ended December 31, 2020 TOTAL Per B Percentage 1004 Sales Revenue Less Vari Costested by Total Variable costs Contribution Margie Less Fred Costs must be listed alphabetically 64.080 13350 34 Total Faxed Cou BMX SEGMENT MARGIN 48138 D E G 390.00 143.00 2 $ 1 Question 3 - Product line Analysis (27 marks) 2 The owners of Mountain Sports Ltd. are currently reviewing a proposal to adopt a new product line - BMX Bicycles. This new product line will be compatible with the Mountain Bikes and open a new target market, younger customers. It is anticipated that the BMX line be introduced next spring 3 4 Management has estimated the following: 5 Expected sales in bikes 480 6 Average selling price per bike $ 7 Purchase cost (COGS) per bike $ 8 Assembly cost per bike $ 55.00 9 Sales clerks required - Seasonal 10 Monthly Salary per Sales Clerk 1,370 11 Sales commissions 15% 12 Advertising campaign (annual cost) $ 4,982 13 14 The additional sales clerks required for the BMX line will only work for four months of the year (May to August). 15 Required: Part A (Chapter 6) (13 marks): Prepare a CVP Income statement (for a one year period) to determine the segment margin for the new BMX Bikes product line. 16 17 BMX Product Line Budgeted CVP Income Statement For the year ended December 31, 2020 TOTAL Per Bike Percentage 20 Number of Bikes 480 18 19 21 ales Revenue 100% 22 Less: Variable Costs must be listed alphabetically) 23 24 25 26 Total Variable Costs 27 28 Less: Fixed Costs (must be listed alphabetically) 29 30 31 Total Fixed Cost 32 33 E G F 33 34 Required Part B (Chapter 6 & 7) (8 marks): This new BMX bike product line will create an increase in sales of two departments: Accessories (refer to Q2 segmented income statement for department information). However, due to the floor space required for retailing BMX Bikes, management estimates that sales of Mountain Bikes will decrease (hint: remember that variable costs will also change when sales change). 35 36 Increase in Accessories Sales 12% 37 Decrease in Mountain Bikes Sales 5% 38 What is the impact to the company's income as a whole of the BMX product line is added (hint: consider the segment margin of the BMX product line, and the impact to the other product lines. Remember that if sales change for a product line, the total variable costs will also change. Thus, contribution margin should be used in your calculations for the other product 39 lines). 40 41 Increase in BMX Segment Margin 42 Increase in Contribution Margin - Accessories Decrease in Contribution Margin - Mountain Bikes 43 (show as negative number) 44 NET Increase (Decrease) in Operating Income 45 46 DECISION: Should the company add the BMX bike product line? 47 48 Why or why not? 49 50 5:28 TEAM 3_Case study 2_ACCTI... : Red Care Chapter 22 marta Amenagement has decided to go ahead without the productie The owner of Mountain Sportare concerned about they of Bito cover isted cats and provide pod retan en Investment RO Antent is required for the necessary for days, and the war provided the minimum return on ment below the the coloration and provide per bento answer the restions below stede 53 5 56 Calculate the following aatai Stop be Derived ambiente Markup stedelicet Is the sweeted selling noted in port Aluficient to the required tuntudy the Are there any other consideration management should take into account before in the product? = Q1 Q2 Q3 04 05 DER BE