Question: Bob's Bike Shop has the following income statement. Sales ($150 per unit) $150,000 Less Cost of Goods sold ($96 per unit) 96,000 Gross margin 54,000

Bob's Bike Shop has the following income statement.

 

Sales ($150 per unit)

 

$150,000

Less Cost of Goods sold ($96 per unit)

 

    96,000

Gross margin

 

54,000

Less Operating costs

 

 

   Salaries

$24,000

 

   Advertising

12,000

 

   Shipping ($6 per unit)

  6,000

   42,000

Operating income

 

$  12,000

 

Required:

 

a.       Calculate the contribution margin per unit.

b.       Calculate the contribution margin ratio.

c.       Calculate the breakeven point in units. In sales dollars.

d.       Calculate the margin of safety in units. In dollars.

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