Question

Gelbart Company manufactures gas grills. Fixed costs amount to $32,510,400 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

Answer 1

Gelbart Company must sell approximately 41,679 gas grills to break even.

Step-by-step explanation:

To calculate the break-even point for Gelbart Company's gas grills, we use the formula:

Break-even point (in units) = Fixed Costs / (Selling Price per Unit - Variable Cost per Unit)

Plugging in the given values:

Break-even point = $32,510,400 / ($1,300 - $520) = $32,510,400 / $780

The calculation yields a break-even point of approximately 41,679 gas grills.
Gelbart Company must sell around 41,679 gas grills to cover all its fixed and variable costs and break even.

Answer 2

the number of gas grills must Gelbart Company sell to break even is 41,680 gas grills

Step-by-step explanation:

The computation of the number of gas grills must Gelbart Company sell to break even is given below:

= Fixed cost ÷ contribution margin per unit

= $32,510,400 ÷ ($1,300 - $520)

= $32,510,400 ÷ $780

= 41,680 gas grills

Hence, the number of gas grills must Gelbart Company sell to break even is 41,680 gas grills