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Zinaida [17]
2 years ago
11

Current operating income for Bay Area Cycles Co. is $40,000. Selling price per unit is $100, the contribution margin ratio is 20

%, and fixed expense is $160,000. Required: 1. Calculate Bay Area Cycle’s per unit variable expense and contribution margin. How many units are currently being sold?
Business
1 answer:
svlad2 [7]2 years ago
6 0

Answer:

Instructions are below.

Explanation:

Giving the following information:

Operating income=  $40,000.

Selling price per unit is $100

Contribution margin ratio= 0.20

Fixed expense is $160,000

<u>First, we need to calculate the unitary variable cost. We can use the contribution margin ratio formula:</u>

<u></u>

contribution margin ratio= (selling price - unitary variable cost) / selling price

0.2 = (100 - unitary variable cost) / 100

unitary variable cost= 80

<u>Now, the contribution margin:</u>

Contribution margin= 100 - 80= $20

<u>Finally, the number of units being sold:</u>

Total contribution margin= operating income + fixed costs

Total contribution margin= 40,000 + 160,000= 200,000

Unitary contribution margin= Total contribution margin/number of units

20= 200,000 / number of units

number of units= 200,000/20

number of units= 10,000 units

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3 0
2 years ago
An individual in the US wants to buy office equipment from England which costs 2,000 pounds. If the exchange rate is 1pound=$1.9
guajiro [1.7K]

<u>Given:</u>

Cost of the office equipment in pounds = 2000

Value of 1 pound in dollars as per exchange rate = 1.9

<u>To find:</u>

The cost of the office equipment in dollars

<u>Solution:</u>

If 1 pound is 1.9 dollars, then 2000 pounds will be as follows,

\Rightarrow\text{1 pound}\rightarrow\text{1.9 dollars}\\\\ \Rightarrow\text{2000 pounds}\rightarrow1.9\times2000 \text{ dollars}=3800 \text{ dollars}\\\\ \therefore \text{The value will be 3800 dollars}

So, the correct option is Option c, that is $3800.

8 0
3 years ago
Which of the following statements is false?
Paul [167]

Answer:

C

Explanation:

C. online retailing and in-store retailing experience similar rates of product return.

3 0
3 years ago
What is the margin of safety?<br> a. $ 25,000<br> b. $ 50,000<br> c. $100,000<br> d. $250,000?
Andrej [43]
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3 0
3 years ago
Item 6 In Year 1, Lee Inc. billed its customers $57,600 for services performed. The company collected $41,200 of the amount bill
katrin [286]

Answer: $57,600

Explanation:

Accounting works by the Accrual basis. What this means is that transactions are recorded in the period they occur not in the period they are paid for.

In the above, Lee Inc. billed its customers $57,600 for services performed during the year. This is a service company and since their revenue comes from billings, this is their revenue for the year.

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