Cedar Mills Incorporated desires an operating income of $72,000. Its variable expenses are $20,000, and its total fixed expenses have increased from $32,000 to $60,000. Its unit contribution margin is $10. Its sales in units to achieve the target profit are

	$13,200.
	$11,200.
	$1,200.
	$15,200.

Question

Oscar Incorporated currently sells its products for $400 per unit. Management is contemplating a 10% increase in the selling price for the next year. Variable costs are currently 20% of sales revenue and are not expected to change next year. Fixed expenses are $140,000 per year.

If fixed costs were to decrease 10% during the current year and the new selling price goes into effect, how many units will need to be sold to breakeven?

	350 units
	1,283 units
	154,000 units
	296 units

Question

The higher the operating leverage factor, the

	greater the impact of volume on operating income.
	more likely operating income is to stay constant.
	less the impact of volume on operating income.
	none of the above.