Reference no: EM132095690

Question - Break-Even in Units

Gelbart Company manufactures gas grills. Fixed costs amount to $16,335,000 per year. Variablecosts per gas grill are $225, and the average price per gas grill is $600.

Required:

1. How many gas grills must Gelbart Company sell to break even?

2. If Gelbart Company sells 46,775 gas grills in a year, what is the operating income?

3. If Gelbart Company's variable costs increase to $240 per grill while the price and fixed costs remain unchanged, what is the new break-even point?

Question - Contribution Margin, Break-Even Units, Contribution Margin Income Statement, Margin of Safety

Zebra Company manufactures custom-designed skins (covers) for iPods and other portable MP3devices. Variable costs are $10.80 per custom skin, the price is $16, and fixed costs are $66,560.

Required:

1. What is the contribution margin for one custom skin? Round your answer to the nearest cent.

2. How many custom skins must Zebra Company sell to break even?

3. If Zebra Company sells 13,000 custom skins, what is the operating income?

4. Calculate the margin of safety in units and in sales revenue if 13,000 custom skins are sold.