1) Break Even Analysis: The Weaver Watch Company sells watches for $25, fixed costs are $140,000, and variable costs are $15 per watch.

1. What is the firm's gain or loss at sales of 8,000 watches? At 18,000 watches?
2. What is the break-even point?
3. What would happen to the break-even point if the selling price was raised to $31? What is the significance of this analysis?
4. What would happen to the break-even point if the selling price was raised to $31 but variable costs rose to $23 a unit?