Ken Bicycle Shop sells 21-speed bicycles. For purposes of cost-volume-profit analysis, the shop owner has divided sales into two categories, as follows: Product type Sales Price Invoice Cost Sales Commissions High Quality Br. 500 Br. 275 Br. 25 Medium Quality 300 135 15 The shop anticipates selling 480 bicycles, of which 360 will be Medium Quality. Annual fixed costs are Br. 65,000. Required: 

(a) What is the shop’s sales mix?

 (b) What is the shop’s breakeven sales volume for each product type? 

(c) What is the shop’s breakeven sales revenue?

 (d) How many bicycles of each type must be sold to earn a target net income of Br. 48,750?

 (e) What will be the amount of reduction in sales that could occur without incurring a loss if the budgeted sales revenue is Br. 200,000

Answer rating: 100% (QA)

ANSWER There are two products namely highquality and mediumquality bikes Data provided include Sales ... View the full answer