1. Pinocchio Company makes wooden puppets and is trying to evaluate their current quarter breakeven point in order to estimate next quarters breakeven given that sales are fairly steady throughout the year. Here are the current facts: variable costs are 70% of sales; sales for the last quarter were $300,000; fixed costs consist of $10,000 in building costs, $30,000 in salaries, $5,000 in insurance and $5,000 in advertising; for each of the last three quarters, the margin of safety has been $80,000. What is Pinocchios break even in sales dollars?

2.

Three Bears Bedding Inc. offers three types of beds: Too Hard, Too Soft, and Just Right. In the past, for every 200 customers who buy a bed, 80 buy the Too Hard, 50 buy the Too Soft, and 70 buy the Just Right bed. Three Bears has calculated a breakeven point of 1,200 beds per month. In reaching break-even, how many of the 1,200 beds will be Just Right?