3. The information that follows was obtained from the accounting records of Gladstone Manufacturing during a period when the company sold 100,000 units. Sales Variable costs Fixed costs Required: $8,800,000 2,400,000 6,016,000 A. Compute the company's per-unit contribution margin and break-even point. B. How many units must Gladstone sell to produce a target net profit of $550,400? C. Assume that Gladstone was able to reduce the variable cost per unit by $4. What selling price could management charge if it desired to maintain the current break-even point? D. Depreciation charges of $640,000 are included in the firm's fixed costs of $6,016,000. If these charges were to increase by 10%, what effect, if any, would this cost increase have on the company's contribution margin? 4. Thompson Company is considering the development of two products: no. 65 or no. 66. Manufacturing cost information follows. Annual fixed costs No. 65 $220,000 No. 66 $340,000 Variable cost per unit 33 25 Regardless of which product is introduced, the anticipated selling price will be $50 and the company will pay a 10% sales commission on gross dollar sales. Thompson will not carry an inventory of these items. Required: A. What is the break-even sales volume (in dollars) on product no. 66? B. Which of the two products will be more profitable at a sales level of 25,000 units? C. At what unit-volume level will the profit loss on product no. 65 equal the profit/loss on product no. 66? COMPREHENSION QUESTIONS 1. Zarith Bhd estimates that variable costs will be 50% of sales and fixed costs will total RM 1,600,000. their selling price of the product is RM 8 per unit where 500,000 units are budgeted to be sold. Required: a) compute the BEP in units and RM using the contribution margin approach b) Compute the margin of safety in units, RM and ratio c) If Zarith Bhd wants to earn a net profit of RM 800,000, how many units must be sold