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Red Cup Inc. also offers a 1-year maintenance plan for each bike sold, priced at...

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Accounting

Red Cup Inc. also offers a 1-year maintenance plan for each bike sold, priced at $100. The variable cost for providing this service is $30 per plan. They expect to sell one maintenance plan for every two bikes sold, regardless of the bike's price.

Calculate:

1. The break-even point in terms of number of bikes sold for each pricing strategy, ignoring the maintenance plan.

2. The break-even point when considering the expected sales of both bikes and maintenance plans under each pricing strategy.

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