Scooters plans to sell a standard scooter for $ 120 and a chrome scooter for $...

70.2K

Verified Solution

Question

Accounting

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.

Answer & Explanation Solved by verified expert
3.6 Ratings (282 Votes)
Please find below the solution 1 Breakeven Sales Fixed Cost Weighted Contribution Margin standard scooter chrome scooter Total Sales Price 12000 16000 Variable cost 3000 4000 Contribution Margin 9000 12000 Contribution Margin ratio 75 75 Sell 1 sell one standard scooter for everythree chrome scooters    See Answer
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students