Big Bike Co. makes three types of bicycles. Current operating data are summarized below:

	Bike A	Bike B	Bike C
Selling Price/Unit	$400	$500	$250
Variable Cost/Unit	$100	$200	$150
Monthly Sales Volume (# of units)	600	400	500

Total fixed expenses per month for the entire company total $185,820. (a) Calculate the contribution margin per unit and contribution margin ratio for each product. (b) Calculate the total sales revenue, total variable expenses, total contribution margin, and total contribution margin ratio for each product and for the company. (c) Calculate the total operating income for the company.

Presented below is the income statement for Anderson Inc. for the month of May:

Sales	$1,280,000
Cost of goods sold	1,180,000
Gross profit	$100,000
Operating expenses	64,000
Operating income	$36,000

The company's contribution margin ratio is 15% (variable expenses are 85% of sales). (a) Rearrange the above income statement to the contribution margin format remember, sales are 100% of sales, and sales x contribution margin ratio = contribution margin.

(b) Calculate the break-even point in sales revenue.

(c) Calculate the sales revenue needed to generate a target profit of $50,000.

(d) Calculate the margin of safety and margin of safety ratio.

XYZ Company has a contribution margin ratio of 60%, fixed expenses of $200,000, and desires to earn operating income of $100,000. Total sales revenue required to achieve XYZ Company's desired operating income is: A. $340,000.

B. $380,000.

C. $420,000.

D. $500,000.

ABC Company's sales are $100,000, fixed costs are $50,000, and variable costs are $30,000. ABC Company's contribution margin and operating income are __________ and __________ respectively. A. $50,000; $20,000

B. $20,000; $70,000

C. $70,000; $50,000

D. $70,000; $20,000

When rearranging a traditional income statement into a contribution margin format, sales revenues _______________ while operating income ______________: A. Increases, decreases

B. Decreases, increases

C. Both decrease

D. Both stay the same

Selling price per unit	$100
Variable expenses per unit	$40
Fixed expenses per month	$60,000

If the sales volume were to decrease 10%, from 4,000 units per month to 3,600 units per month, variable expenses per unit would:

A.	decrease 10%.

B.	stay the same.

C.	increase 10%.

D.	decrease 15%.

Selling price per unit	$100
Variable expenses per unit	$40
Fixed expenses per month	$60,000

If sales volume were to decrease 10%, from 4,000 units per month to 3,600 units per month, fixed expenses would:

A.	increase $6,000.

B.	decrease $6,000.

C.	decrease $24,000.

D.	stay the same.