Using the following information for Bicycleco, answer the questions below. January February March # bicycles produced...
Using the following information for Bicycleco, answer the questions below.
|
January |
February |
March |
|
|
# bicycles produced |
400 |
500 |
650 |
|
Depreciation |
$3000 |
$3000 |
$3000 |
|
Labor |
$18,000 |
$22,000 |
$28,000 |
|
Wheels |
$8000 |
$10,000 |
$13,000 |
- Identify each of the above costs as fixed, mixed, or variable.
- Create equations for each cost.
- If Bicycleco sells bikes for $2000 each and sells all the bikes produced each month, create CFISes for each month above.
- Calculate breakeven for Bicycleco. Is your calculation likely to be in the relevant range? Why or why not?
- If Bicycleco wants to earn $800,000 after tax and the tax rate is 30%, how many bicycles must Bicycleco sell?
Homework Answers
CFI Statements
| Particular | Jan(Unit-400)($) | Feb(Unit-500)($) | Mar(Unit-650)($) |
| Sales(Unit*Sale Price) | 800000 | 1000000 | 1300000 |
| Less:Labor | (18000) | (22000) | (28000) |
| Weels | (8000) | (10000) | (13000) |
| Contribution | 774000 | 968000 | 1259000 |
| Less:Depreciation | (3000) | (3000) | (3000) |
| PBT | 771000 | 935000 | 1256000 |
| Less:tax @30% | (231300) | (280500) | (376800) |
| PAT | 539700 | 654500 |
879200 |
Calculation Breakeven for Bicycleco where PBT=0
Jan
Breackeven Point=
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