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  3. current operating income for bay area cycles co. i

Current operating income for Bay Area Cycles Co. is $38,000. Selling price per unit is...

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Accounting

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Current operating income for Bay Area Cycles Co. is $38,000. Selling price per unit is $100, the contribution margin ratio is 25%, and fixed expense is $152,000. Required 1. Calculate Bay Area Cycle's break-even point in units and total sales dollars. Break-even units 6,080 Break-even dollars608,000 2. Calculate Bay Area Cycle's margin of safety and margin of safety ratio. Margin of safety Margin of safety ratio The cost structure of two firms competing in the same industry is represented by the following cost formulas: Company X $1,466,000 + $35/ unit, Company Z = $872,000 + $68/unit. The selling price is $122 per unit for both companies. Required 1.Calculate the indifference point between the two cost structures, that is, the amount of unit sales that produce the same operating income for Company X and Company Z Indifference point volume units 2. If sales volume were expected to increase by 25% over the next two years, which cost structure would you prefer? CompanyX Company Z

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