12. Lee Company manufactures and sells widgets for $2 per unit. Its variable cost per unit is $1.70. Lee's total fixed costs are $10,500, How many widgets must Lee Company sell to break even? A) B) C) D) E) 5,250 6,176 35,000 52,500 61,760 13. Management anticipates fixed costs of $72,500 and variable costs equal to 40% of sales. What will pretax income equal if sales are $325,000? $57,500 $122,500 $130,000 $181,250 $252,500 A) B) C) D) 14. Ivan Company has a goal of earning $70,000 after-tax income. Ivan would need to pay $20,000 of income taxes at the target level of income. The contribution margin ratio is 30%. What amount of dollar sales must be achieved to reach the goal if fixed costs are $36,000? A) B) $23,333 $36,000 $300,000 $353,333 $420,000 D) 15. Mueller Corp. manufactures compact discs that sell for $5. Fixed costs are $28,000 and variable costs are $3.60 per unit. Mueller can buy a newer production machine that will increase fixed costs by $8,000 per year but will decrease variable costs by $0.40 per unit. What effect would the purchase of the new machine have on Mueller's break-even point in units? A) 4,444 unit increase. 9,850 unit decrease 5,714 unit increase. 4,444 unit decrease. No effect on the break-even point in units. C) D) E)