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Information concerning a product produced by Gibson Company appears as follows: Sales price per unit Variable cost per unit T

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Answer #1

Solution

a. Contribution margin per unit $          84.00
b. Break-even in units 6200
c. Required sales in units 8400

Working

Formula Working
a. Contribution margin per unit $          84.00 (sales price Minus Variable cost) 171-87
b. Break-even in units 6200 (Total fixed cost/Contribution margin per unit) 520800/84
c. Required sales in units 8400 ([Total fixed cost+desired profit]/Contribution margin per unit) (520800+184800)/84
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