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Use the following to answer the next five questions: At Wendell Corporation, the selling price per unit is $800 and variable cost per unit is
Use the following to answer the next five questions: At Wendell Corporation, the selling price per unit is $800 and variable cost per unit is $500. Fixed costs are $1,000,000 per year. Wendell's contribution margin per unit is: a. $300 b. $375 c. 2,300 units d. None of the above. 6. 7. Wendell's break-even point is approximately a. 3,333 units b. 6,667 units c. 5,500 units d. None of the above 8. Assuming Wendell's sales are $3,000,000, profit will be: a. $125,000 b. $680,000 c. $750,000 d. None of the above If Wendell sells 20 units above its break-even point, what will be the company's net income? a. $16,000 b. $12,000 c. $6,000 d. $3,000 9. 10. Assume Wendell is selling 4,000 units. If Wendell decreases its advertising (a fixed cost) by $100,000, which results in 500 additional sales, what is Wendell's new net income? a. $160,000 b. $120,000 c. $250,000 d. $300,000
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