Question

Gibson Manufacturing Company reported the following data regarding a product it manufactures and sells. The sales price is $44 Variable costs Manufacturing Selling 11 per unit 7 per unit Fixed costs Manufacturing Selling and administrative $160,000 per year $180,600 per year Required a. Use the per-unit contribution margin approach to determine the break-even point in units and dollars. b. Use the per-unit contribution margin approach to determine the level of sales in units and dollars required to obtain a profit of $156,000. c. Suppose that variable selling costs could be eliminated by employing a salaried sales force. If the company could sell 20,800 units how much could it pay in salaries for salespeople and still have a profit of $156,000? (Hint: Use the equation method.) 13,100 Break-even point in dollars576,400 19,100 $840,400 a. Break-even point in units b. Required sales in units Required sales in dollars c. Fixed cost of salaries

Answer 1

Answers for a, b are correct.

Now I am calculation for question c