1) Voellers Upholstery Co. produces inexpensive leather chairs. The average selling price for one of the chairs is $400. The variable cost per chair is $250. Voellers has average fixed costs per year of $450,000.

a. What is the break-even point in units?

b. What is the break-even point in dollar sales?

c. What would be the operating profit or loss associated with the production and sale of

(1) 3,000 chairs, (2) 4,000 chairs?

2) ABC Corp. has estimated the following income statement for its next fiscal year.

Sales	$20,000,000
Variable costs	6,000,000
Revenue before fixed costs	14,000,000
Fixed costs	9,000,000
EBIT	5,000,000
Interest expense	900,000
Earnings before taxes	4,100,000
Taxes (35%)	1,435,000
Net income	$2,665,000

a. What is the break-even point in sales dollars for the firm?

b. If the average unit cost is $20, what is the break-even point in units?

3) Techno Robots produces a functioning toy robot. At a production and sales level of 10,000 robots, the firm has the following information:

Selling price per unit = $15

Variable costs per unit = $8

EBIT = $17,500

What is the break-even point in units for the firm?

4) Wheely Bike Manufacturers expects to produce and sell 9,000 made-to-order bicycles this year. Variable costs are 40 percent of sales while fixed costs total $600,000. At what price must each bicycle be sold for Wheely to earn EBIT of $450,000?

5) The following information pertains to the Classic Burger Restaurant chain:

Sales	$600,000
Variable costs	300,000
Total contribution margin	300,000
Fixed costs	100,000
EBIT	200,000
Interest expense	50,000
Earnings before taxes	150,000
Taxes (30%)	45,000
Net income	$105,000

a. If sales increase by 10%, what will be the new level of EPS if the firm has 100,000 shares outstanding?

b. What is the percentage increase in EPS? Explain the difference between the percentage increase in sales and the percentage increase in EPS.