Gumbo Corporation is a wholesaler that sells a single product called Mumbo. Management has provided the following cost data for two levels of monthly sales volume. The company sells the product for $138.80 per unit.

Sales volume (units)	6,000	7,000
Cost of sales	$369,000	$430,500
Selling and administrative costs	$407,400	$418,600

the cost of sales is a variable cost and selling and administrative costs are mixed costs.

Per unit cost of sales=61.5. The cost formula for selling and administrative costs is Y=340,200 +11.20(X)

The contribution margin per unit for the product Mumbo will $73.70

True

False

2 points

QUESTION 10

Gumbo Corporation is a wholesaler that sells a single product called Mumbo. Management has provided the following cost data for two levels of monthly sales volume. The company sells the product for $138.80 per unit.

Sales volume (units)	6,000	7,000
Cost of sales	$369,000	$430,500
Selling and administrative costs	$407,400	$418,600

the cost of sales is a variable cost and selling and administrative costs are mixed costs.

Per unit cost of sales=61.5. The cost formula for selling and administrative costs is Y=340,200 +11.20(X)

The contribution margin per unit for the product Mumbo will be $66.10

The break even in units will be 5147

True

False