G$9$

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A

B

C

D

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E

P

F

G

Question $1$: Product line Analysis $(23$ marks$)$

H

The owners of Mountain Sports Ltd$.$ are currently reviewing a proposal to adopt a new product line $-$ BMX Bikes. This new product line will be compatible with their $2$ existing product line, Mountain Bikes and open a new target market, younger customers. It is anticipated that the BMX line be introduced next spring.

$3$

Management has estimated the following for the BMX Bike product line:

$*$The company will need to hire three sales clerks for the BMX line. This sales clerk will only work for four months of the year $($May to October$).$

calculated in your explanation$)$:

Explanation

Required:

Part A Prepare a budgeted CVP income statement $($for a one year period$)$ to determine the segment margin for the new BMX Bikes product line. $(8$ marks$)$

BMXProduct Line

Budgeted CVP Income Statement

For the year ended December $31,2022$

$\backslash$table$[[,$TOTAL,Per Bike,Percentage$],[$Number of Bikes,$1,200,,],[$Sales Revenue,$$450,000,$$$375\mathrm{.}00,100\%$