Scooters plans to sell a standard scooter for $ 120 anda chrome scooter for $ 160. Steve's purchases the standard scooterfor $ 30 and the chrome scooter for $ 40. Steve's expects to sellone standard scooter for every three chrome scooters. Steve'smonthly fixed costs are $ 85,500.
1. How many of each type of scooter must Steve'sScooters sell each month to break? even?
(Fixed costs + Target profit)/ Weighted-avg. CM per unit =Required sales in units
Standard Scooter formula: ______+_____/_____= required sales inunits
Chrome Scooter formula: ______+_____/_____= required sales inunits
Stevie's must sell ____ standard scooters and _____ Chromescooters to break even.
2. How many of each type of scooter must Steve'sScooters sell each month to earn $ 67,500?
Standard Scooter formula: ______+_____/_____= required sales inunits
Chrome Scooter formula: ______+_____/_____= required sales inunits
Stevie's must sell ____ standard scooters and _____ Chromescooters.
3. Suppose Steve's expectation to sell one standardscooter for every three chrome scooters was incorrect and for everyfour scooters sold two are standard scooters and two are chromescooters. Will the breakeven point of total scooters increase or?decrease? Why?? (Calculation not? required.)
Each standard scooter contributes $____ to profits while eachchrome scooter contributes$_____ to profit.Therefore, the increasein sales of standard scooters and decrease in chrome scooters woudcause the weighted average contribution margin to _______ and thebreak even point to _______.
I am stuck at how to find the weighted-avg. CM per unit.
