Ww.226. Gibert's Steel Parts produces parts for the automobile industry. The company has monthly fixed expenses of $670,000 and a contribution margin of 90% of revenues Gilbert feels like he's in a giantsqueeze play. The automotive manufacturers are demanding lower prices, and the steel producers have increased raw material costs. Gilbert's contribution margin has shrunk to 70% of revenuesThe company's monthly operating income, prior to these pressures, was $275,000Read the requirementsRequirement 1. To maintain this same level of profit, what sales volume (in sales revenue) must Gilbert now achieve?Begin by identifying the formula to compute the sales in units at various levels of operating income using the contribution margin approach.Target sales in dollarsCIDRequirements1.To maintain this same level of profit, what sales volume (in sales revenue) mustGibert now achieve?2.Gilbert believes that his monthly sales revenue will only go as high as$1,050,000. He is thinking about moving operations overseas to cut fixed costsIf monthly sales are $1,050,000, by how much will he need to cut fixed costs tomaintain his prior profit level of $275,000 per month?PrintDonePinne allCheck answer

Introduction:- CVP analysis is used to identify the changes in costs and volume affect a company's…

Answered: Gilbert's Steel Parts produces parts…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter3: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 5EB: Cadre, Inc., sells a single product with a selling price of $120 and variable costs per unit of $90....

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