Blue Mouse Manufacturers$$s marketing sales director doesn$$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 $$25,000,000.$ In fact, she believes that the firm will be able to sell only about $150,000$ units. However, she also thinks the demand for Blue Mouse Manufacturers$$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$$s EBIT goal of $$25,000,000?$

$$298\mathrm{.}39$ per unit

$$324\mathrm{.}34$ per unit

$$272\mathrm{.}44$ per unit

$$259\mathrm{.}47$ per unit

What affects the firm$$s operating break$-$even point?

Several factors affect a firm$$s operating break$-$even point. Based on the scenarios described in the following table, indicate whether these factors would increase, decrease, or leave unchanged a firm$$s break$-$even quantity$$assuming that only the listed factor changes and all other relevant factors remain constant.

Increase

Decrease

No Change

The variable cost per unit decreases.

The amount of debt increases, causing the firm$$s total interest expense to increase.

The firm$$s fixed costs increase.

When a large percentage of a firm$$s costs are fixed, the firm is said to have a degree of operating leverage.