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Barclay Enterprises manufactures and sells three distinct styles of bicycles: th

ID: 2602787 • Letter: B

Question

Barclay Enterprises manufactures and sells three distinct styles of bicycles: the Youth model sells for $380 and has a unit contribution margin of $145; the Adult model sells for $930 and has a unit contribution margin of $490; and the Recreational model sells for $1,080 and has a unit contribution margin of $540. The company's sales mix includes: 5 Youth models; 9 Adult models; and 6 Recreational models. If the firm's annual fixed costs total $6,580,000, calculate the firm's selling price per composite unit

Explanation / Answer

Solution:-

Calculation of firm's selling price per composite unit:-

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Quantity Selling price per unit Total per composite unit Youth model 5 380 1,900 Adult model 9 930 8,370 Recreational model 6 1,080 6,480 16,750
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