Pedal Limited is a multiproduct bicycle manufacturer. The following information is available about the company’s products:

Mountain Bikes Road Bikes Commuting Bikes

Sales €120,000 €420,000 €360,000

Variable costs €64,000 €220,000 €140,000

Contribution Margin €56,000 €200,000 €220,000

Direct Fixed Costs €45,000 €70,000 €90,000

Allocated indirect fixed costs €20,000 €70,000 €60,000

Operating Profit (€9,000) €60,000 €70,000

i. Pedal Limited currently sells 500 road bikes. What is the breakeven sales volume for road bikes (3 Marks)

ii. Pedal Limited has struck up a valuable relationship with a prominent social media influencer who is willing to promote sales of one of Pedal’s products. Which product should be given to the influencer to promote? Explain why. (3 Marks)

iii. If Mountain Bikes are discontinued what will be the impact on Pedal’s operating profit? (3 marks)