1. The Laos Marketing Company is expecting an increase of fixed cost by $180,000 upon moving their place of business to downtown area. Likewise, it is anticipating that the selling price per unit and the variable expense will not change. At present, the sales volume necessary to breakeven is $4,680,000 but with the expected increase in fixed costs, the sales volume necessary to breakeven would go up to $5,400,000. Based on these projections, what would be the total fixed costs after the increase of $180,000?

a. $2,880,000 b. $1,350,000 c. $1,638,000 d. $1,170,000

2. Lopez Company had a net loss of $3.00 per unit when sales were 40,000 units. When sales were 50,000 units, the company had a loss of $1.60 per unit. How much is the contribution margin per unit of the product? a. $4.00 b. $1.75 c. $4.60 d. $1.40

3. If the profit margin before tax is 8%, contribution margin 20%, and a margin of safety of $80,000. What is Cotts fixed cost? a. $24,000 b. $16,000 c. $96,000 d. $80,000