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XYZ Company is a retailer of widgets. XYZ pays $4.75 for each widget and sells them for $8.00. Monthly fixed costs are $26,000. The widget
XYZ Company is a retailer of widgets. XYZ pays $4.75 for each widget and sells them for $8.00. Monthly fixed costs are $26,000. The widget cost is the only variable cost. (10 points)
a. What is the contribution margin per unit?
b. What is the break-even point in units?
c. How many units will XYZ need to sell to earn target profit of $13,000?
d. How much would net income increase if XYZ Company sold 100 more units?
e. If the fixed costs increased, what would be the effect on the break-even point?
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