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 costs (68,000) Contribution margin
Gilley, Inc., sells a single product. The company's most recent income statement is given below.
Sales (4,000 units) $120,000
Less variable costs (68,000)
Contribution margin 52,000
Less fixed expenses (40,000)
Net income $ 12,000
Required: Determine the following:
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. # _______________
g. Compute marring of safety in units #______________
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