Only work on part 2

8. Due to the the economic crisis in 2008, the Bi-Wheels Company has experienced some difficulty in selling its bicycles. The following data relate to the current year: Sales (10,000 units) $1,000,000 Less variable costs 700,000 Contribution margin $300,000 Less fixed costs 600,000 Net operating loss ($300,000) Required: 1. Compute Bi-Wheels' annual breakeven point, in both units and dollars. Also, compute the contribution margin ratio and the contribution margin per unit. K. Refer to the original data. The vice-president in charge of sales is certain that a 10% reduction in selling price in combination with a $50,000 increase in advertising will cause sales volume to increase by 40%. What effect would this strategy have on the operating income of the company? 4 points