Required Part B (Chapter 6 & 7) (7 marks): This new BMX bike product line will create an increase in sales of two departments: Accessories (refer to Q2 segmented income statement for department information). However, due to the floor space required for retailing BMX Bikes, management estimates that sales of Mountain Bikes will decrease (hint: remember that variable costs will also change when sales change). Increase in Accessories Sales Decrease in Mountain Bikes Sales 10% 7% What is the impact to the company's income as a whole if the BMX product line is added (hint: consider the segment margin of the BMX product line, and the impact to the other product lines. Remember that if sales change for a product line, the total variable costs will also change. Thus, contribution margin should be used in your calculations for the other product lines). Increase in BMX Segment Margin Increase in Contribution Margin - Accessories Decrease in Contribution Margin - Mountain Bikes (show as negative number) NET Increase (Decrease) in Operating Income $ es DECISION: Should the company add the BMX bike product line? Why or why not? 56,723