The Following Information Was Extracted from the Accounting Records of Gumbo

Essay

The following information was extracted from the accounting records of Gumbo Corporation: $\begin{array}{lr}\text { Selling price per unit } & \$ 60 \\\text { Variable cost per unit } & \$ 20 \\\text { Total fixed costs } & \$ 480,000\end{array}$
A. What is Gumbo’s break-even point in units?
B. How many units must be sold to earn operating income of $80,000?
C. What is Gumbo’s break-even point in units is the selling price increases by 20% and the variable costs decrease by 20%?
D. Using the information in part C, what sales level in dollars is needed to earn an operating income of $80,000?