2.Cost-volume-profit analysis is frequently based on the assumption that the production level is the same as the sales level.
3.A product sells for $30 per unit and has variable costs of $18 per unit. The fixed costs are $720,000. If the variable costs per unit were to decrease to $15 per unit and fixed costs increase to $900,000, and the selling price does not change, break-even point in units would
a. increase by 20,000
c. increase by 6,000
d. decrease by 20,000
e. not change
4.A firm expects to sell 25,000 units of its product at $11 per unit. Pretax income is predicted to be $60,000. If the variable costs per unit are $5, total fixed costs must be
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