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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