Scooters Ltd sells three types of scooters. It has fixed costs of $258,000 per month. The...

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Scooters Ltd sells three types of scooters. It has fixed costs of $258,000 per month. The sales and variable costs of these products for April are shown below: Sales Variable costs $1 $1000 000 $ 700 000 52 $1 500 000 $ 900 000 53 $2 500 000 $1 250 000 (1.5 marks) (3.5 marks) (1.5 marks) (1.5 marks) a) Determine the sales mix of the three products. b) Calculate the break-even point in sales dollars for the company. c) Calculate the break-even point in sales dollars for each scooter. d) Calculate the margin of safety at the present sales level in dollars. e) Discuss the weaknesses of the CVP analysis technique as a financial planning tool. Can flexible budgets be used to overcome its weaknesses? Explain. Scooters Ltd sells three types of scooters. It has fixed costs of $258,000 per month. The sales and variable costs of these products for April are shown below: Sales Variable costs $1 $1000 000 $ 700 000 52 $1 500 000 $ 900 000 53 $2 500 000 $1 250 000 (1.5 marks) (3.5 marks) (1.5 marks) (1.5 marks) a) Determine the sales mix of the three products. b) Calculate the break-even point in sales dollars for the company. c) Calculate the break-even point in sales dollars for each scooter. d) Calculate the margin of safety at the present sales level in dollars. e) Discuss the weaknesses of the CVP analysis technique as a financial planning tool. Can flexible budgets be used to overcome its weaknesses? Explain.

Answer rating: 100% (QA)

a The sales mix of the three products can be determined by calculating the percentage of sales for e... View the full answer