Washington Products Had Costs of $600,000 When Sales Equaled 75,000

Washington Products had costs of $600,000 when sales equaled 75,000 units. When sales increased by 25,000 units, costs increased by $125,000. The selling price is $9 per unit.
Required:
(a.) Determine the fixed and variable portions of costs.
(b.) Prepare a contribution margin income statement for a month with sales of 80,000 units.

Correct Answer:

Verified

(a.)
Variable cost per unit = $125,000 /...

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