Review the 2020Annual Report for Peloton (clickon this link). https://investor.onepeloton.com/static-files/9595d9d3-9e56-40fe-bbce-07176ae274d6(Links to an external site.)
Base on theinformation in this annual report, answer thefollowing questions:
- What types of products do they make? hint: they make a few things
- 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).
- 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.
- Based on your answers, compute the unit contribution margin and the contribution margin ratio.
- 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?
- 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.
- Next, construct a contribution margin income statement that shows the break-even point in both units and sales dollars.
- 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.
- 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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