Problem:

The information that follows was obtained from the accounting records of Gladstone Manufacturing during a period when the company sold 100,000 units.

• Sales: $8,800,000
• Variable Costs: 2,400,000
• Fixed Costs: 6,016,000

Required:

Question 1: Compute the company's per-unit contribution margin and break-even point.

Question 2: How many units must Gladstone sell to produce a target net profit of $550,400?

Question 3: Assume that Gladstone was able to reduce the variable cost per unit by $4. What selling price could management charge if it desired to maintain the current break-even point?

Question 4: Depreciation charges of $640,000 are included in the firm's fixed costs of $6,016,000. If these charges were to increase by 10%, what effect, if any, would this cost increase have on the company's contribution margin?

Note: Please provide full description.