Redfern Bicycles International Pty Ltd produces and sells three different types of mountain bikes. Information regarding...

 

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Redfern Bicycles International Pty Ltd produces and sells three different types of mountain bikes. Information regarding the three models is shown below. Trail Bike (TB) Downhill (DH) Total Unit sold Selling price Variable cost Cross country (XC) 5,000 units $800 $500 10,000 units $500 $300 25,000 units $350 $250 40,000 units The company's total fixed costs to produce the bicycles are $7,500,000. a) Determine and explain the sales mix as a function of units sold for the three products (5 Marks). b) Determine and explain the weighted-average unit contribution margin (5 Marks). c) Determine and explain the total number of units that the company must produce to break even (5 Marks). d) Determine and explain the number of units of each model that the company must produce to break even (5 Marks). Redfern Bicycles International Pty Ltd produces and sells three different types of mountain bikes. Information regarding the three models is shown below. Trail Bike (TB) Downhill (DH) Total Unit sold Selling price Variable cost Cross country (XC) 5,000 units $800 $500 10,000 units $500 $300 25,000 units $350 $250 40,000 units The company's total fixed costs to produce the bicycles are $7,500,000. a) Determine and explain the sales mix as a function of units sold for the three products (5 Marks). b) Determine and explain the weighted-average unit contribution margin (5 Marks). c) Determine and explain the total number of units that the company must produce to break even (5 Marks). d) Determine and explain the number of units of each model that the company must produce to break even (5 Marks).

Answer rating: 100% (QA)

a Sales mix as a function of units sold for the three products To determine the sales mix we need to calculate the percentage of units sold for each p... View the full answer