Griggs Company produces a single product with a current selling price of $170. Variable costs are $130 per unit, and fixed costs per month average $6,240. Management is considering increasing the selling price to a proposed $190 per unit. Assume that the variable cost per unit of the product and monthly fixed expenses will not change as a result of the proposed increase in selling price.
Hint: Treat each situation (current and proposed price) as separate potential scenarios when evaluating each question.
At the current selling price of $170 per unit, closest to what dollar volume of sales per month is required for Griggs to break-even? (Round the intermediate percentage to one decimal place, and round the answer up to the next whole unit.)
Multiple Choice
$20,800
$8,299
$26,554
$6,178
Contribution margin ratio = Contribution margin/Sales
= (170-130)/170 = 23.5%
Breakeven sales = Fixed cost/Contribution margin ratio
= 6240/23.5%
= 26,554
Option C is the answer
Griggs Company produces a single product with a current selling price of $170. Variable costs are...
Griggs Company produces a single product with a current selling price of $170. Variable costs are $130 per unit, and fixed costs per month average $6,240. Management is considering increasing the selling price to a proposed $190 per unit. Assume that the variable cost per unit of the product and monthly fixed expenses will not change as a result of the proposed increase in selling price. Hint: Treat each situation (current and proposed price) as separate potential scenarios when evaluating...
Griggs Company produces a single product with a current selling price of $170. Variable costs are $130 per unit, and fixed costs per month average $6,240. Management is considering increasing the selling price to a proposed $190 per unit. Assume that the variable cost per unit of the product and monthly fixed expenses will not change as a result of the proposed increase in selling price. Hint: Treat each situation (current and proposed price) as separate potential scenarios when evaluating...
Griggs Company produces a single product with a current selling price of $170. Variable costs are $130 per unit, and fixed costs per month average $6,240. Management is considering increasing the selling price to a proposed $190 per unit. Assume that the variable cost per unit of the product and monthly fixed expenses will not change as a result of the proposed increase in selling price. Hint: Treat each situation (current and proposed price) as separate potential scenarios when evaluating...
Griggs Company produces a single product with a current selling price of $170. Variable costs are $130 per unit, and fixed costs per month average $6,240. Management is considering increasing the selling price to a proposed $190 per unit. Assume that the variable cost per unit of the product and monthly fixed expenses will not change as a result of the proposed increase in selling price. Hint: Treat each situation (current and proposed price) as separate potential scenarios when evaluating...
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