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    Hunter Inc.: Analysis of Net Income and Margin Ratio

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    Hunter Inc. sells a unique product with the following information available:

    Sales price - $85 per unit
    Variable costs- $25 per unit
    Fixed costs- $10,000
    Units produced and sold - 1,250

    1. If one more unit is sold, net income will:

    a) decrease by $33
    b) increase by $52
    c) increase by $60
    d) decrease by $8

    2. What is the contribution margin ratio?

    a) 41.67%
    b) 2.40%
    c) 70.59%
    d) 61.18%

    Please provide detailed analysis.

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    https://brainmass.com/business/financial-ratios/hunter-analysis-net-income-margin-ratio-525189

    Solution Preview

    1.
    10,000 / 1,250 = 8
    85 - 25 - 8 = 52

    b) increase by $52

    Formula: Fixed costs / units sold = 8.00
    Sales price less ...

    Solution Summary

    This solution provides the correct answers with needed explanations and calculations to determine the net income and contribution margin ratio for Hunter, Inc. 1 reference included.

    $2.19

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