Acct 2102 Review Test 1 1. Gilbert, Inc. sells a single product. The company\'s

Question

Acct 2102 Review Test 1 1. Gilbert, Inc. sells a single product. The company's most below. $120,000 Sales (4,000 units) Less variable expenses (68.000 Contribution margin Less fixed expenses Net income 52,000 (40,000) $ 12,000 Required: a. Contribution margin per unit is b. If sales are doubled to $240,000, total variable costs will equal If sales are doubled to $240,000, total fixed costs will equal c. 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. 2. Black Pearl In

Explanation / Answer

a Contribution margin per unit = 52000/4000= $13 b Variable expense ratio=68000/12000= 56.6667% Total variable costs = 240000*56.6667% = $136000 c Total fixed costs = $40000 d Profit will increase by $130(10*13) e Break even = 40000/13=3077 f Units to be sod=(40000+20000)/13= 4615

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