Current operating income for Bay Area Cycles Co. is $75,000. Selling price per unit is $150;
the contribution margin ratio is 30%, and fixed expense is $298,500.
First – calculate Bay Area Cycle’s per unit variable expense and contribution margin. How many units are
currently being sold? How many additional unit sales would be necessary to achieve operating income
of $124,500.
Second – Calculate Bay Area Cycle’s break-even point in units and sales dollars.

Question

06-10-2022
Business

Answered

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Current operating income for Bay Area Cycles Co. is $75,000. Selling price per unit is $150;
the contribution margin ratio is 30%, and fixed expense is $298,500.
First – calculate Bay Area Cycle’s per unit variable expense and contribution margin. How many units are
currently being sold? How many additional unit sales would be necessary to achieve operating income
of $124,500.
Second – Calculate Bay Area Cycle’s break-even point in units and sales dollars.

Sagot :

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