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Question - Pelos Bicycles makes stationary bikes. They are planning for the coming year. In the coming year, they plan to sell each bike for $800 per unit. The unit variable costs are $300. In addition, they anticipate that their fixed costs will be $1,000,000.
Based on this information:
1. Calculate the contribution margin per unit.
2. How many units will they need to sell if they wish to break even?
3. How many units will they need to sell if they wish to generate a profit of $500,000?
Show all work for full credit.
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