1) T2 Company sells products for $100 each that have variable costs of $25 per unit. T2 annual fixed costs are $1,500,000. Determine break-even in units and in dollars. PROVE your answer!

2) Sales below the breakeven point indicate a __________ whereas sales above the breakeven point indicate a __________.

a) loss, loss

b) loss, profit

c) profit, loss

d) profit, profit

3) Which of the following is true regarding variable costs per unit?

a) they will decrease as production increases

b) they will increase as production decreases

c) they will remain the same as production levels change

d) they will decrease as production decreases