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Current operating income for Bay Area Cycles Co. is $20,000. Selling price per unit is $100, the contribution margin ratio is 20%, and fixed expense is $80,000. Required: 1. Calculate Bay Area Cycle's per unit variable expense and contribution margin. How many units are currently being sold? Revenue Variable expense Contribution margin Fixed expense Operating income $ Additional unit sales Per Unit 100.00 Volume units $ Total (80,000) 20,000 Ratio 2. How many additional unit sales would be necessary to achieve operating income of $60,000? 100 % % 20 %

Current operating income for Bay Area Cycles Co. is $20,000. Selling price per unit is $100, the contribution margin ratio is 20%, and fixed expense is $80,000. Required: 1. Calculate Bay Area Cycle's per unit variable expense and contribution margin. How many units are currently being sold? Revenue Variable expense Contribution margin Fixed expense Operating income $ Additional unit sales Per Unit 100.00 Volume units $ Total (80,000) 20,000 Ratio 2. How many additional unit sales would be necessary to achieve operating income of $60,000? 100 % % 20 %

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Current operating income for Bay Area Cycles Co. is $20,000. Selling price per unit is $100, the contribution margin ratio is 20%, and fixed expense is $80,000. Required: 1. Calculate Bay Area Cycle's per unit variable expense and contribution margin. How many units are currently being sold? Revenue Variable expense Contribution margin Fixed expense Operating income $ Additional unit sales Per Unit 100.00 Volume units $ Total (80,000) 20,000 Ratio 2. How many additional unit sales would be necessary to achieve operating income of $60,000? 100 % % 20 %
Transcribed Image Text:Current operating income for Bay Area Cycles Co. is $20,000. Selling price per unit is $100, the contribution margin ratio is 20%, and fixed expense is $80,000. Required: 1. Calculate Bay Area Cycle's per unit variable expense and contribution margin. How many units are currently being sold? Revenue Variable expense Contribution margin Fixed expense Operating income $ Additional unit sales Per Unit 100.00 Volume units $ Total (80,000) 20,000 Ratio 2. How many additional unit sales would be necessary to achieve operating income of $60,000? 100 % % 20 %
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