Question
In: Accounting
Red Rider makes three types of electric scooters. The company’s total fixed cost is $1,296,000,000. Selling...
Red Rider makes three types of electric scooters. The company’s total fixed cost is $1,296,000,000. Selling prices, variable cost, and sales percentages for each type of scooter follow:
Selling Price Variable Cost Percent of Total Unit Sales
Mod. $2,200. $1,900. 30
Rad. $3,700. $3,000. 50
X-treme $6,000. $5,000. 20
a. What is Red Rider’s break-even point in units and sales dollars?
Units. Dollars
Mod
Rad
X-treme
Total
b. If the company has an after-tax income goal of $1 billion and the tax rate is 50 percent, how many units of each type of scooter must be sold for the goal to be reached at the current sales mix?
Units. Dollars
Mod
Rad
X-treme
Total
c. Assume the sales mix shifts to 50 percent Mod, 40 percent
Rad, and 10 percent X-treme. How does this change affect your
answer to (a)?
Note: Do not round until you determine the number
of units of each product; round number of units to the next highest
whole unit in your calculations.
Units. Dollars
Mod
Rad
X-treme
Total
Solutions
Expert Solution
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ekkarill92 answered 2 years agoRelated Solutions
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