Oberon Company manufactures dorm-room-sized refrigerators. Fixed costs amount to $270,000 per year. Variable costs per refrigerator are $23, and the average price per refrigerator is $50.

Required:

1. How many refrigerators must Oberon Company sell to break even?

2. If Oberon Company sells 16,000 refrigerators in a year, what is the operating income?

3. If Oberon Company’s variable costs decrease to $20 per refrigerator while the price and fixed costs remain unchanged, what is the new break-even point?