B) 56.9%.

C) 52.8%.
D) Some other percentage.
Answer: B
Feedback:
(65 28)/65 = 56.9%

76. Refer to the above information. At the reduced selling price of $65 per unit, what dollar
volume of sales per month is required to break even? (Rounded)
A) $27,842.
B) $22,727.
C) $21,090.
D) $27,842.
Answer: C
Feedback:
12,000/56.9% = 21,090

Use the following to answer 77-81

Great Gadget Company produces a single product with a current selling price of $160. Variable
costs are $120 per unit, and fixed costs per month average $5,180. Management is considering
increasing the selling price to $180 per unit. Assume that the cost of the product and monthly
fixed expenses will not change as a result of the proposed increase in selling price.

77. Refer to the above information. At the current selling price of $160 per unit, the contribution
margin ratio is:
A) 25%.
B) 75%.
C) 33 1/3%.
D) 30%.
Answer: A
Feedback:
(160 120)/160 = 25%

78. Refer to the above information. At the current selling price of $160 per unit, what dollar
volume of sales per month is required for Great Gadget to break even?
A) $5,120.
B) $6,907.
C) $20,720.
D) $15,556.
Answer: C
Feedback:
5,180/.25 = 20,720

79. Refer to the above information. At the current selling price of $160 per unit, what dollar
volume of sales per month is necessary for Great Gadget to generate monthly operating income of
$9,000?
A) $36,000.
B) $18,907.
C) $59,200
D) $56,720.
Answer: D
Feedback:
(9,000 + 5,180)/.25 = 56,720