1. A company's break-even point in sales revenue is $200,000. Its variable expenses are 60% of sales.

What level of sales revenue would this company need in order to achieve an operating profit of $30,000?

2. Freiman Corporation's most recent balance sheet and income statement appear below:

Balance Sheet
December 31, Year 2 and Year 1
(in thousands of dollars)
	Year 2			Year 1
Assets
Current assets:
Cash	$	170		$	130
Accounts receivable, net		245			265
Inventory		130			140
Prepaid expenses		45			45
Total current assets		590			580
Plant and equipment, net		750			750
Total assets	$	1,340		$	1,330
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	140		$	160
Accrued liabilities		95			95
Notes payable, short term		65			75
Total current liabilities		300			330
Bonds payable		295			305
Total liabilities		595			635
Stockholders' equity:
Common stock, $2 par value		110			110
Additional paid-in capital		225			225
Retained earnings		410			360
Total stockholders' equity		745			695
Total liabilities & stockholders' equity	$	1,340		$	1,330

Income Statement
For the Year Ended December 31, Year 2
(in thousands of dollars)
Sales (all on account)	$	1,510
Cost of goods sold		880
Gross margin		630
Selling and administrative expenses		384
Net operating income		246
Interest expense		45
Net income before taxes		201
Income taxes (30%)		60
Net income	$	141

The acid-test (quick) ratio at the end of Year 2 is closest to:

3. The management of Casablanca Manufacturing Corporation believes that machine-hours is an appropriate measure of activity for overhead cost. Shown below are machine-hours and total overhead costs for the past six months:

	Machine-Hours			Overhead Cost
Jan	150,000			$	339,000
Feb	140,000			$	328,000
Mar	160,000			$	350,000
Apr	130,000			$	319,500
May	170,000			$	362,500
Jun	200,000			$	400,000

Assume that the relevant range includes all of the activity levels mentioned in this problem.

If Casablanca expects to incur 185,000 machine hours next month, what will the estimated total overhead cost be using the high-low method? (Round your intermediate calculations to 2 decimal places.)

4. The following data pertains to activity and maintenance cost for two recent periods:

Activity level (units)		8,000			7,000
Maintenance cost	$	34,000		$	31,500

Maintenance cost is a mixed cost with both fixed and variable components. Using the high-low method, the cost formula for maintenance cost is: (Round your intermediate calculations to 2 decimal places.)