Georgeland Cycles makes and sells two models of electric bicycles. The Commuter (a folding model) sells for $2,509.00 and the Tour-X (a fat-tire trail model) sells for $4,509.00. Unit variable costs for the Commuter are $1,759.00 and for the Tour-X $3,209.00. Annualfixed costs at Georgeland are $556,150. The marketing manager estimates that the annual mix of sales is 30 percent Commuter modeland 70 percent Touring model.Required:a. How many of each model ebike must Georgeland Cycles sell every year to break even?b. How many of each model ebike must Georgeland Cycles sell every year to earn operating profits of $102,150 before taxes?

Break-even analysis is a financial and managerial accounting method used to calculate the point at…

Answered: Georgeland Cycles makes and sells two…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Georgeland Cycles makes and sells two models of electric bicycles. The Commuter (a folding model) sells for $2,516.00 and the Tour-X (a fat-tire trail model) sells for $4,516.00. Unit variable costs for the Commuter are $1,766.00 and for the Tour-X $3,216.00. Annual fixed costs at Georgeland are $635,600. The marketing manager estimates that the annual mix of sales is 30 percent Commuter model and 70 percent Touring model. Required: a. How many of each model ebike must Georgeland Cycles sell every year to break even? b. How many of each model ebike must Georgeland Cycles sell every year to earn operating profits of $102,150 before taxes? Complete this question by entering your answers in the tabs below. Required A Required B How many of each model ebike must Georgeland Cycles sell every year to break even? Tour-X Commuter
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