Acme Industries manufactures mouse traps in its production facility. It sells its mouse traps for $15 each. Acme's fixed costs are $540,000. The variable cost for each mouse trap is $1.50. How many units must Acme sell to break even?

a. 34,000.

b. 36,000.

c. 38,000.

d. 40,000.

Acme's sales increase by 20%. Acme has a degree of operating leverage (DOL) of 3.0 and degree of financial leverage of 1.5. What is the impact of the increase in sales on EPS?

a. 20%.

b. 30%.

c. 60%.

d. 90%.