Gelbart Company manufactures gas grills. Fixed costs amount to $25,587,900 per year. Variable costs per gas grill are $315, and the average price per gas grill is $900. 

1.How many gas grills must Gelbart Company sell to break even? _______________gas grills

2.If Gelbart Company sells 46,365gas grills in a year, what is the operating income? $___________

3.If Gelbart Company's variable costs increase to $333per grill while the price and fixed costs remain unchanged, what is the new break-even point?____________gas grills

2. CVP Analysis of Multiple Products

Steinberg Company produces commercial printers. One is the regular model, a basic model that is designed to copy and print in black and white. Another model, the deluxe model, is a color printer-scanner-copier. For the coming year, Steinberg expects to sell 90,000 regular models and 18,000 deluxe models. A segmented income statement for the two products is as follows:

		Regular Model		Deluxe Model		Total
Sales		$13,500,000		$12,150,000		$25,650,000
Less: Variable costs		9,000,000		7,290,000		16,290,000
Contribution margin		$4,500,000		$4,860,000		$9,360,000
Less: Direct fixed costs		1,200,000		960,000		2,160,000
Segment margin		$3,300,000		$3,900,000		$7,200,000
Less: Common fixed costs						1,280,000
Operating income						$5,920,000

Required:

1.Compute the number of regular models and deluxe models that must be sold to break even. Round all intermediate calculations to four decimal places, and round your final answers to the nearest whole unit.

Regular models	____________units
Deluxe models	____________units

2.Using information only from the total column of the income statement, compute the sales revenue that must be generated for the company to break even. Round the contribution margin ratio to four decimal places. Use the rounded value in the subsequent computation. (Express as a decimal-based amount rather than a whole percentage.) Round the amount of revenue to the nearest dollar.

Contribution margin ratio	____________
Revenue	$____________

3. CVP: Before- and After-Tax Targeted Income

Head-Gear Company produces helmets for bicycle racing. Currently, Head-Gear charges a price of $230 per helmet. Variable costs are $80.50 per helmet, and fixed costs are $1,255,800. The tax rate is 25 percent. Last year, 14,000 helmets were sold.

Required:

1.What is Head-Gear's net income for last year? $___________

2.What is Head-Gear's break-even revenue? In your computations, round the contribution margin ratio to two decimal places. $___________

3.Suppose Head-Gear wants to earn before-tax operating income of $900,000. How many units must be sold? Round to the nearest whole unit. ___________units

4.Suppose Head-Gear wants to earn after-tax net income of $650,000. How many units must be sold? In your computations, round dollar amounts to the nearest dollar. Round your final answer to the nearest whole unit. ___________units

5.Suppose the income tax rate rises to 35 percent. How many units must be sold for Head-Gear to earn after-tax income of $650,000? Round to the nearest whole unit. ___________units