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Required Part C: Pricing (Chapter 9) (12 marks) Assume management has decided to go ahead with offering the BMX product line. The owners of Mountain Sports are concerned about the ability of BMX to cover its fixed costs and provide a good return on investment (ROI). An investment is required for the necessary fixtures, display racks, and inventory. The owners have provided the minimum return on investment below. Use the cost information and unit sales provided in part A above to answer the questions below. 3 Suggested selling price $ 373.00 4 Required investment in assets $ 202,000 18% 5 Minimum return on investment 6 7 Calculate the following: Unit product cost (costs incurred to get the bike 8 ready for sale) 9 Total selling & administrative costs 0 Selling & administrative cost per bike 1 Desired return on investment per bike 2 Markup percentage using absorption costing 3 Suggested selling price using absorption costing 4 5 Is the suggested selling price (noted in part A) sufficient to earn the required 6 return expected by the owners? 7 What is the projected return on investment (Chapter 11) for the BMX product line (use BMX segment margin as the operating income number) 9 0 Based on ROI, should management add the new BMX product line? 1 Why or why not? Case Intro | Q1 Q2 Q3 Q4 Edit Accessibility. Investigate 1015 + Required Part C: Pricing (Chapter 9) (12 marks) Assume management has decided to go ahead with offering the BMX product line. The owners of Mountain Sports are concerned about the ability of BMX to cover its fixed costs and provide a good return on investment (ROI). An investment is required for the necessary fixtures, display racks, and inventory. The owners have provided the minimum return on investment below. Use the cost information and unit sales provided in part A above to answer the questions below. 3 Suggested selling price $ 373.00 4 Required investment in assets $ 202,000 18% 5 Minimum return on investment 6 7 Calculate the following: Unit product cost (costs incurred to get the bike 8 ready for sale) 9 Total selling & administrative costs 0 Selling & administrative cost per bike 1 Desired return on investment per bike 2 Markup percentage using absorption costing 3 Suggested selling price using absorption costing 4 5 Is the suggested selling price (noted in part A) sufficient to earn the required 6 return expected by the owners? 7 What is the projected return on investment (Chapter 11) for the BMX product line (use BMX segment margin as the operating income number) 9 0 Based on ROI, should management add the new BMX product line? 1 Why or why not? Case Intro | Q1 Q2 Q3 Q4 Edit Accessibility. Investigate 1015 +

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