The Gillett company's breakeven point in units is 25,000. Assuming that variable costs are 50% and fixed costs are $500,000, what is the company's projected operating income if sales are $1,250,000?

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The contribution margin ratio is 50% (since variable costs are 50%). Sales of $1,250,000 result in a contribution margin of $625,000 (50% of $1,250,000). Subtracting fixed costs of $500,000 from the contribution margin gives a projected operating income of $125,000.

The Gillett Company's Breakeven Point in Units Is 25,000