The Following Information Was Extracted from the Accounting Records of Gumbo

question 30

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 $\mathrm { C }$ , what sales level in dollars is needed to earn an operating income of $\$ 80,000 ?$

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Definitions:

Expectancy Effects

Phenomena where an experimenter's or observer's expectations about a participant can actually influence the outcome of a study or the behavior of the participant.

Internal Locus

A psychological term referring to individuals who believe they can control their life outcomes through their actions.

Low Self-Monitoring

Describes individuals who are less concerned with self-presentation and more authentic in their interactions, often showing little variation in behavior across different situations.

Erroneous Stereotypes

Refers to incorrect and oversimplified beliefs or generalizations about groups or types of people that often lead to misunderstandings or prejudiced attitudes.