Current operating income for Bay Area Cycles Co. is $38,000. Selling price per unit is $100, the
Question:
Current operating income for Bay Area Cycles Co. is $38,000. Selling price per unit is $100, the contribution margin ratio is 25%, and fixed expense is $152,000.
Required:
1. Calculate Bay Area Cycle’s per unit variable expense and contribution margin. How many units are currently being sold?
Per Unit | Volume | Total | Ratio | ||
Revenue | $ 100.00 | 100 | % | ||
Variable expense | % | ||||
Contribution margin | 25 | % | |||
Fixed expense | (152,000) | ||||
Operating income | $ 38,000 |
2. How many additional unit sales would be necessary to achieve operating income of $95,000?
Additional unit sales | 2,280 | units |
Current operating income for Bay Area Cycles Co. is $26,000. Selling price per unit is $100, the contribution margin ratio is 25%, and fixed expense is $104,000.
Required:
1. Calculate Bay Area Cycle’s breakeven point in units and total sales dollars.
Break-even units | |
Break-even dollars |
2. Calculate Bay Area Cycle’s margin of safety and margin of safety ratio.
Margin of safety | ||
Margin of safety ratio | % |
Accounting What the Numbers Mean
ISBN: 978-1260565492
12th edition
Authors: David Marshall, Wayne McManus, Daniel Viele