be profitable, a firm has recover its costs. These costs firm evaluates at what stage it would recover the invested costs is to calculate how many units or how much in doilar sales is necessary for the firm to earn a profit. both its fixed and its variable costs. One way that a Consider the case of Free Spirit Industries Inc.: Free Spirit Industries is for $37.50 per unit, and will incur a variable cost of $12.80 per unit es Inc. is considering a project that will have fixed costs of $15,000,000. The product will be sold Given Free Spirit's cost structure, it will have to sel units to break even on this project (Qu). Free Spirit Industries Inc.'s marketing sales director doesn't think that the market for the firm's goods is big enough to sell enough units to make the company's target operating profit of $15,000,000. In fact, she believes that the firm will be able to sell only about 150,000 units. However, she also thinks the demand for Free Spirit Industries Inc.s product is relatively inelastic, so the firm can increase the sale price. Assuming that the firm can sell 150,000 units, what price must it set to meet the CFO's EBIT goal of $15,000,000? O $212.80 O $266.00 O $244.72 O $223.44 What affects the firm's operating break-even point? Several factors affect a firm's operating break-even point. Based on the scenarios described in the following table, would increase, decrease, or that only the listed factor changes and all other relevant factors remain constant No Change The product's sales price increases. The firm's tax rate increases. When a large percentage of a firm's costs are fixed, the firm is said to have a degree of operating leverage