Units sold 10,000

Selling price $200 per unit

Variable costs $110 per unit

Total fixed costs $200,000

Tax rate 40%

1. How many units have to be sold in order to earn an aftertax net income of $600,000?

a. 11,111

b. 12,222

c. 13,333

d. 14,444

2. First: Prepare a contribution margin income statement based on the 10,000 units sold. Second: Using one of the short-cut tricks that you learned, assuming sales increased by 30 percent, what would the new net income be?

a.	$870,000
b.	$970,000
c.	$1,070,000
d.	$1,170,000

3. First: Go back to the original data and use the contribution margin income statement based on the 10,000 units sold that you just prepared for Question #10. Second: Using the other short-cut trick that you learned, assuming the sales price increased by 20 percent, what would the new net income be?

a.	$1,100,000
b.	$1,200,000
c.	$1,300,000

d. $1,140,000

4. First: Go back to the original data and use the contribution margin income statement based on the 10,000 units sold that you prepared for Question #10. Suppose variable costs increase by 30% and fixed costs decrease 40%. What is the new breakeven point in units?

A. 1905 units

B. 2005 units

C. 2105 units

D. 2205 units