1. Gary Corporation manufactures a single product. The selling price is $104 per

Question

1. Gary Corporation manufactures a single product. The selling price is $104 per unit, and variable costs amount to $78 per unit. The fixed costs are $36,000 per month. (4.5 pts) (a) What is the contribution margin per unit?$ (b) What is the contribution margin ratio? (c) What is the monthly sales volume (in dollars) at the break-even point? per unit (d) How many units must be sold each month to earn a monthly operating income of $32,000? (e) What is the monthly margin of safety (in dollars) if 3,000 units are sold each month? (f) What will be the monthly operating income if 3,000 units are sold each month? units

Explanation / Answer

Dear Student Thank you for using Chegg Please find below the answer and please give thumbs up   Statementshowing Computations Paticulars Amount Sales price per unit            104.00 Less Variable Expenses per unit            (78.00) a) Contribution Margin per unit              26.00 Fixed cost      36,000.00 b) Contribution margin ratio = 26/104 25.00% c) BEP in $ = 36000/25%    144,000.00 d) Income      32,000.00 Fixed cost      36,000.00 Contribution desired      68,000.00 Units to be sold = 68000/26        2,615.38 e) Sales revenue from 3000 Units    312,000.00 BEP in $    144,000.00 Margin of safety = 312000- 144000    168,000.00 f) Income = 3000*26- 36000      42,000.00

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