Barclay Enterprises Manufactures and Sells Three Distinct Styles of Bicycles

Barclay Enterprises manufactures and sells three distinct styles of bicycles: the Youth model sells for $300 and has a unit contribution margin of $105; the Adult model sells for $850 and has a unit contribution margin of $450; and the Recreational model sells for $1,000 and has a unit contribution margin of $500. The company's sales mix includes: 5 Youth models; 9 Adult models; and 6 Recreational models. If the firm's annual fixed costs total $6,500,000, calculate the firm's contribution margin per composite unit.

A) $1,055.
B) $1,950.
C) $1,255.
D) $7,575.
E) $1,500.

Correct Answer:

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