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Current operating income for Bay Area Cycles Company is $56,000. Selling price per unit is $100, the contribution margin ratio is 20%, and fixed expense
Current operating income for Bay Area Cycles Company is $56,000. Selling price per unit is $100, the contribution margin ratio is 20%, and fixed expense is $228,000.
Required:
- Calculate Bay Area Cycles 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 $140,000?
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