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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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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.

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

b) increase by $52

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

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