1. Byrnes Company currently produces and sells 5,000 units of a product that has a contribution margin of $3 per unit. The company sells the product for a sales price of $20 per unit. Fixed costs are $12,000. The company has recently invested in new technology and expects the variable cost per unit to fall to $14 per unit. The investment is expected to increase fixed costs by $6,000. After the new investment was made, how many units had to be sold to breakeven?

   	a.	3,000 units
   	b.	2,000 units
   	c.	6,000 units
   	d.	4,000 units

1. Consider the following cost-volume-profit graph. The letters (A) and (B) represent:

   

   	a.	Total revenue curve and Loss area.
   	b.	Total cost curve and Profit Area.
   	c.	Total revenue curve and Profit area.
   	d.	Total cost curve and Loss area.

1. Bull's Eye Industries would break even at $600,000 in total sales. Assuming the company sells its product for $50 per unit, what is its margin of safety if sales total $800,000?

   	a.	33%
   	b.	1,000 units
   	c.	2,000 units
   	d.	25%

1. Pilato Inc. recently started a new advertisement campaign for one of its products. All other costs and revenues were unchanged. Select the response that indicates the correct impact on the company's break-even point and margin of safety. Break-even Point Margin of Safety

   	a.	Increase Decrease
   	b.	Decrease Increase
   	c.	Decrease Decrease
   	d.	Increase Increase