Archie sells a single product for $50. Variable costs are 60% of the selling price, and the company has fixed costs that amount to $400,000. Current sales total 16,000 units.

1.Archie's contribution margin per product is:

2.Archie's break-even point in units is:

3.To earn $22,000, Archie's sales (in dollars) must total:

4.If sales increase by $100,000, operating income will increase by:

Use the following information for the next question.

Presented below is the income statement and contribution (margin) income statement.

5.What is the break-even pointin dollars?

Income Statement

Sales

$4,000,000

Less: Cost of goods sold

2,300,000

Gross margin

$1,700,000

Less: Operating expenses

1,400,000

Net income

$300,000

Contribution (margin) Income Statement

Sales

$4,000,000

Less: Variable costs

2,800,000

Gross margin

$1,200,000

Less: Fixed costs

900,000

Net income

$300,000