Refer to the current information for Bay Area Cycle Co. in Mini-Exercise 12.4. In Mini-Exercise 12.4, Current

Question:

Refer to the current information for Bay Area Cycle Co. in Mini-Exercise 12.4.
In Mini-Exercise 12.4, Current operating income for Bay Area Cycles Co. is $70,000. Selling price per unit is $100, the ratio is 35%, and fixed expense is $280,000.

Required:
Calculate Bay Area Cycle's break-even point in units and total sales dollars.
Calculate Bay Area Cycle's margin of safety and margin of safety ratio.

Contribution Margin
Contribution margin is an important element of cost volume profit analysis that managers carry out to assess the maximum number of units that are required to be at the breakeven point. Contribution margin is the profit before fixed cost and taxes...