the following below was produced by the RC51 COMPILER from the source you provided.

mychar = 0xFF;
mymask = 0x02; //I want to get bit 1
mybit = mychar & mymask;

converts to..

ASSEMBLY LISTING OF GENERATED OBJECT CODE

            ; FUNCTION main (BEGIN)
                                           ; SOURCE LINE # 20 
0000 7500FF  R      MOV    mychar,#0FFH
                                           ; SOURCE LINE # 21 
0003 750002  R      MOV    mymask,#002H
                                           ; SOURCE LINE # 22 
0006 E500    R      MOV    A,mymask
0008 5500    R      ANL    A,mychar
000A 24FF           ADD    A,#0FFH
000C 9200    R      MOV    mybit,C

Is this not tight enough..