1 Ava Co. sells custom jewelry for $200. The variable cost per jewel is $160. Ava has fixed operating costs of $4,000. What is Ava's operating breakeven quantity of sales, in units? A. 150 units B. 120 units C. 90 units D. 100 units 2 Shinn Co. sells custom markers for $3.00 apiece. The variable cost per marker is $0.83. Shinn has fixed operating costs of $1,800 and fixed financing (interest) costs of $500. On average, Shinn sells 10,000 units. What is Shinn's degree of operating leverage (DOL)? A. 325% B. 300% C. 109% D. 223% 3 Davis Co. sells watches for $115 apiece. The variable cost per watch is $89. Davis has fixed operating costs of $12,000 and fixed financing (interest) costs of $48,000. On average, Davis sells 10,000 units. What is Davis's degree of financial leverage (DFL)? A. 124% B. 220% C. 130% D. 105% 4 Teal Company has a DOL of 120%. If sales were to increase by 5%, what is the expected impact on Earnings Before Interest and Tax (EBIT)? A. EBIT is expected to increase by 5%. B. EBIT is expected to decrease by 6%. C. EBIT is expected to increase by 6%. D. EBIT is expected to increase by 120%.