Norco Bicycle Company manufactures and sells three different types of bikes (eg Road Bike, Mountain Bike, and
Question:
Norco Bicycle Company manufactures and sells three different types of bikes (eg Road Bike, Mountain Bike, and Hybrid Bike) with the following sales and variable cost data: Road Bike Sales, $310,000 Variable Costs $150,000
Mountain Bike Sales in Dollars $270,000 Variable Costs $153,000
Hybrid Bike Sales in Dollars $215,000 Variable Costs $136,500
If Norco's fixed expenses for the entire company total $235,000 and the sales mix is stable: (round all Percentage Figures to three decimal places and round all Dollar Values to the nearest whole dollar as needed).
Required:
1. a) What is the total amount of Sales in dollars for the total of three bikes that Norco must obtain to achieve Breakeven?
2. b) Based on your answer to Part (a), what are the total Sales in dollars for each of Norco's three different bikes (eg Road Bike, Mountain Bike, and Hybrid Bike)? break even? And provide evidence to support your answer.
3. c) Using the original data, if Norco's marginal tax rate is 34% and they want an after-tax profit of $145,000, what is the total sales in dollars for all three bikes and each of the three different bikes? What bikes are required for breakeven (i.e. Road Bike, Mountain Bike and Hybrid Bike)? And provide evidence to support your answer.
Managerial accounting
ISBN: 978-0471467854
1st edition
Authors: ramji balakrishnan, k. s i varamakrishnan, Geoffrey b. sprin