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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:
 Selling price per unit $60 Variable cost per unit $20 Total fixed costs $480,000\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\$ 80,000 ?
C. What is Gumbo's break-even point in units is the selling price increases by 20%20 \% and the variable costs decrease by 20%20 \% ?
D. Using the information in part C\mathrm { C } , what sales level in dollars is needed to earn an operating income of $80,000?\$ 80,000 ?

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Definitions:

Free Association

A psychoanalytic therapy technique in which a patient verbalizes thoughts as they come to mind, without censorship or filtering, to uncover subconscious feelings or desires.

Behavior Therapy

A form of psychotherapy that focuses on changing undesirable behaviors through conditioning techniques.

Liquid-Sensitive Pad

A pad designed to detect the presence of liquids; often used in medical, caretaking, or technological contexts to signal spills or wetness.

Biomedical Therapy

Treatments for mental disorders that involve physiological interventions, such as medication, to correct or alleviate symptoms.

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