Current operating income for Bay Area Cycles Co. is $22,000. Selling price per unit is $100, the contribution margin ratio is 25%, and fixed expense is $88,000. Required: 1. Calculate Bay Area Cycles per unit variable expense and contribution margin. How many units are currently being sold?

2. How many additional unit sales would be necessary to achieve operating income of $65,000?

Per Unit Volume Total Ratio Revenue Variable expense Contribution margin: Fixed expense Operating income 100.00 100% 75.00 25 | % (88,000) S 22,000 Additional unit sales units