Baldwin Bicycle Company Case Study

Read through the Baldwin Bicycle Case materials and answer the following questions. 1. Based on the income statement for 1992 and the information in item 5 of exhibit 2 that the company sold 98,791 bicycles for 1992, how much was the average per unit sales price, average per unit cost of sales, and average gross margin per bicycle 2. If the yearly fixed manufacturing overhead costs of Baldwin are $1,500,000, and the total cost of sales are as listed in the 1982 income statement, …

…Note:<Tab/>The information about overhead in item 1 of case Exhibit 2 can be used to infer that fixed manufacturing overhead is about $1.5 million per year. *<Tab/>Includes items specific to models for Hi-Valu, not used in our standard models. **<Tab/>Accountant says about 40 percent of total production overhead cost is variable; 125 percent of DL$ rate is based on volume of 100,000 bicycles per year.