bicycle manufacturer has sold 450 pieces of its special mountain bikes this month. Based on sales results and customer feedback the company anticipates that demand for the bikes will increase to 500 in the next month. Company does not increase the fixed cost which is $30,000/month as the current production facility can support the production of bikes to meet the expected demand of coming month. i. If the price of the bike is $120 for each and variable cost is 35% of the price of a bike. What will be the breakeven quantity? ii. If the company sells 500 bikes and makes a profit of $10,000 in the next month. what should be the price per bike if the variable cost is $4
bicycle manufacturer has sold 450 pieces of its special mountain bikes this month. Based on sales results and customer feedback the company anticipates that demand for the bikes will increase to 500 in the next month. Company does not increase the fixed cost which is $30,000/month as the current production facility can support the production of bikes to meet the expected demand of coming month. i. If the price of the bike is $120 for each and variable cost is 35% of the price of a bike. What will be the breakeven quantity? ii. If the company sells 500 bikes and makes a profit of $10,000 in the next month. what should be the price per bike if the variable cost is $4
Chapter3: Cost-volume-profit Analysis
Section: Chapter Questions
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A bicycle manufacturer has sold 450 pieces of its special mountain bikes this month. Based on sales results and customer feedback the company anticipates that demand for the bikes will increase to 500 in the next month. Company does not increase the fixed cost which is $30,000/month as the current production facility can support the production of bikes to meet the expected demand of coming month.
i. If the price of the bike is $120 for each and variable cost is 35% of the price of a bike. What will be the breakeven quantity?
ii. If the company sells 500 bikes and makes a profit of $10,000 in the next month. what should be the price per bike if the variable cost is $4
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