Red Company prepared the following budget information for the coming year: Bike A Bike B...
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Accounting
Red Company prepared the following budget information for the coming year: Bike A Bike B Bike C Total Sales $75,000 $1,000,000 $160,000 $1,235,000 Variable expenses 25,000 800,000 80,000 905,000 Contribution margin $50,000 $200,000 $80,000 $330,000 Fixed expense 230,000 Operating income $100,000 The budget assumes the sale of 30,000 units of Bike A, 110,000 units of Bike B, and 60,000 units of Bike C.
INSTRUCTIONS:
a) What is the company's break-even point in sales dollars given the sales mix above?
b) What is the companys break-even point in units given the sales mix above?
c) How many units of each type of bike will be sold at the break-even point?
d) What is the companys margin of safety in dollars?
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