Tims Bicycle Shop sells 21-speed bicycles. For purposes of a cost-volume-profit analysis, the shop owner has divided sales into two categories, as follows:

Product Type Sales Price Invoice Cost Sales Commission

High-quality $500 $275 $25

Medium-quality 300 135 15

Three-quarters of the shops sales are medium-quality bikes. The shops annual fixed expenses are $65,000. (In the following requirement, ignore income taxes.)

Required:

1. Compute the unit contribution margin for each product type.
2. What is the shops sales mix?
3. Compute the weighted average unit contribution margin, assuming a constant sales mix.
4. What is the shops break-even sales volume in dollars? Assume a constant sales mix.
5. How many bicycles of each type must be sold to earn a target net income of $48,750? Assume a constant sale mix.