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Review the 2020Annual Report for Peloton (clickon this link). to an external site.) Base on theinformation in...

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Review the 2020Annual Report for Peloton (clickon this link). to an external site.)

Base on theinformation in this annual report, answer thefollowing questions:

  1. What types of products do they make? hint: they make a few things
  2. Next, choose and identify one of their products and discuss what are the major variable costs of making this product (you'll need to make some assumptions here but you can also find some details in the AR).
  3. Provide your best guess of the variable cost per unit for this product (you can gather some clues from the Income Statement). You do not need to do extensive research to find out the cost of the inputs, but try to come up with a reasonable estimate.
  4. Based on your answers, compute the unit contribution margin and the contribution margin ratio.
  5. Next, give a managerial interpretation of the unit contribution margin and contribution margin ratio for this product. How could managers use this information to make decisions and what kind of decisions might they be faced with?
  6. Next, construct a numerical example of how to find the break-even point. Again, you will need to make an assumption about the total fixed costs but see what you can gather from looking over the Income Statement.
  7. Next, construct a contribution margin income statement that shows the break-even point in both units and sales dollars.
  8. Next, provide a numerical example showing how managers could use the contribution margin ratio to determine the total sales revenue needed to earn a target profit. Again, you will need to make an assumption about total fixed costs.
  9. Lastly, give your overall impression of this company and your thoughts on their continued performance as well as their continued viability.

Please use correct grammar and full sentences. Please answer by numbers, example XXXXXXXXXX10pointdeductionfor not doing this). do not copy and paste sentences directly from the textbook (use your own words).

Sentences taken directly from theannual report must have proper APA or MLA citation. 800 words minimum for the entire assignment isexpected.

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Answered 5 days After Mar 12, 2022


Ayushi answered on Mar 14 2022
76 Votes
Peloton Interactive Inc
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Interactive Inc. is a New York based company which deals in equipments of exercise and media. It deals in connected fitness products which include Peloton Bike and Bike+ and Peloton Tread and Tread+ and another product it offers is connected fitness subscriptions.
Question 2:
The subscriptions are available on the basis of different plans like month to month basis or yearly plan. These subscriptions can be taken by anyone whether household users or anyone else and they have access to all the classes that are live and can also take other classes as per their demands. The subscribers get various services like track of their fitness goals and they also get connected to the community of fitness. Even they can also get access to the peloton digital platform where they can download the app and take classes online from their home only, various other digital services are also provided to the subscribers like the diet charts and workout from home and direct interaction with the fitness teachers ("Peloton® | Exercise Bike With Indoor Cycling Classes Streamed Live & On-Demand"). The online platform by using the best technology has helped Peloton to attract more subscribers and increase its sale base and betterment in the profits. The revenue generated by Peloton Interactive Inc. for the year ending June, 2020 is approximately $363.7 million for the connected fitness subscriptions product. It was a great improvement in comparison to the previous years when the revenue generated from the subscriptions was $181.1 million for year ending June, 2019. The total cost incu
ed for the subscription was $155.7 million which included both fixed and variable costs. The fixed costs include the cost related to the rent of the studio, fees of the instructor and any other overheads related to the studio and managing personnel. If we take a look at the variable cost then it includes cost related to royalty fees for music, cost of the content in relation to past use, streaming cost for the third party platforms and the...

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