Tim's Bicycle Shop sells 21-speed bicycles. For purposes of a cost-volume-profit analysis, the shop owner has divided sa

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Tim S Bicycle Shop Sells 21 Speed Bicycles For Purposes Of A Cost Volume Profit Analysis The Shop Owner Has Divided Sa 1 (46.99 KiB) Viewed 13 times

Tim's 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 High-quality Medium-quality Sales Price Invoice Cost Sales Commission $1,950 $890 970 670 $110 50 Three-quarters of the shop's sales are medium-quality bikes. The shop's annual fixed expenses are $289,000. (In the following requirements, ignore income taxes.) Required: 1. Compute the unit contribution margin for each product type. 2. What is the shop's sales mix? 3. Compute the weighted-average unit contribution margin, assuming a constant sales mix. 4. What is the shop's 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 $127,500? Assume a constant sales mix.