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Question - Product Type Sales Price Invoice Cost Sales Commission
High Quality $1,000 $550 $50
Medium Quality 60 270 30
Seventy percent of the shop's sales are medium quality bikes. The shop's annual fixed expenses are $148.500 (In the following requirements, ignore income taxes)
1. Compute the unit contribution margin for each product type
2. What is the shop's sales mix?
3. Compute the weighted-average unit contribution margin, assuming a constant sales mix
4. What is the shop's break even sales volume in dollars? Assume constant sales mix
5. How many bicycles of each type must be sold to earn a target net income of $99,000? Assume a constant sales mix.
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