EBIT SensitivityStewart Industries sells its finished product for $8.86

per unit. Its fixed operating costs are $19,200 and the variable operating cost per unit is $4.86.

a. Calculate the firm's earnings before interest and taxes (EBIT) for sales of 8,000

units.

b. Calculate the firm's EBIT for sales of 5,000

and 11,000

units, respectively.

c. Calculate the percentage changes in sales (from the 8,000-unit

base level) and associated percentage changes in EBIT for the shifts in sales indicated in part

(b).

d. On the basis of your findings in part (c),

comment on the sensitivity of changes in EBIT in response to changes in sales.