Gilley, Inc., sells a single product. The company\'s most recent income statemen

Question

Gilley, Inc., sells a single product. The company's most recent income statement is given below. Sales (4,000 units) $120,000 Less variable expenses (68,000) Contribution margin 52,000 Less fixed expenses (40,000) Net income $ 12,000 Required: a. Contribution margin per unit is $ ________ per unit b. If sales are doubled to $240,000, total variable costs will equal $ ________ c. If sales are doubled to $240,000, total fixed costs will equal $ ________ d. If 10 more units are sold, profits will increase by $ ________ e. Compute how many units must be sold to break even. # ________ f. Compute how many units must be sold to achieve profits of $20,000. # ________

Explanation / Answer

a. Contribution margin per unit is $ 13per unit b. If sales are doubled to $240,000, total variable costs will equal $ 1,36000 c. If sales are doubled to $240,000, total fixed costs will equal $ 40000 d. If 10 more units are sold, profits will increase by $ 130 e. Compute how many units must be sold to break even.# 3077units f. Compute how many units must be sold to achieve profits of $20,000. #4616 units

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