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Chapter 16 Homework

Break-Even in Units Gelbart Company manufactures gas grills. Fixed costs amount to $31,683,600 per year. Variable costs per gas grill are $520, and the average price per gas grill is $1,300. Required: 1. How many gas grills must Gelbart Company sell to break even? 37,676 X gas grills 2. If Gelbart Company sells 43,045 gas grills in a year, what is the operating income? $ 1,956,500 x 3. If Gelbart Company's variable costs increase to $546 per grill while the price and fixed costs remain unchanged, what is the new break-even point? If required, round your answer to the nearest whole number. 37,676 X gas grills Feedback Check My Work 1. Break-even in units (Fixed costs / Contribution margin per unit). 2. Sales - Variable cost = Contribution margin - Fixed expenses = Operating Income. 3. Recalculate break-even in units with new information