Wheely Bike Manufacturers expects to produce and sell 9,000 made-to-order bicycles this year. Variable costs
are 40 percent of sales while fixed costs total $600,000. At what price must each bicycle be sold for Wheely to
earn EBIT of $450,000?
What will be an ideal response?
9,000P - (.40)(9,000)P - $600,000 = $450,000
9,000P - 3,600P - $600,000 = $450,000
5,400P = $1,050,000
P = $194.44
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What will be an ideal response?
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