1. Chesser Industries manufactures telescopes that sell for $200 each. Variable costs are $120 per unit and fixed costs are $400,000. What is Chessers break-even point in sales dollars?

a. $2,000

b. $3,333

c. $50,000

d. $666,666

e. $1,000,000

6. The measure that reflects an organizations variable and fixed cost relationship and indicates how a percentage change in sale from the current level will impact from the current level will impact profits is called the

a. break-even point.

b. contribution margin.

c. degree of operating leverage.

d. gross margin.

e. margin of safety.

3. Reliable Furniture manufactures recliners selling for $500 each. Variable costs per unit are $175 for direct material, $125 for direct labor, and $50 for variable overhead. Fixed costs are $300,000 for selling and administrative costs. The company wants to earn a before-tax profit of $600,000. How many recliners must be sold to accomplish managements objective?

a. 1,200 units

b. 1,800 units

c. 4,000 units

d. 4,500 units

e. 6,000 units