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 costsremain unchanged, what is the new break-even point?
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 costsremain unchanged, what is the new break-even point?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Gelbart Company manufactures gas grills. Fixed costs amount to $16,335,000 per year. Variable
costs 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?
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