USE THE FOLLOWING FOR QUESTIONS 7--10:

ABC COMPANY

Units sold 30,000

Selling price $100 per unit

Variable costs $90 per unit

Total fixed costs $400,000

Tax rate 25%

7. For ABC COMPANY, how many units have to be sold in order to earn an aftertax net income of $360,000?

a. 28,000

b. 48,000

c. 68,000

d. 88,000

8. For ABC COMPANY, using one of the short-cut tricks that you learned, assuming the sales increase by 15%, what would be the increase in net income? HINT: First prepare an income statement at the current level of activity (30,000 units)

a.	$45,000
b.	$50,000
c.	$450,000
d.	$650,000

9. For ABC COMPANY, using the other short-cut trick that you learned, assuming sales price increased by 15%, what would be the increase in net income? HINT: First prepare an income statement at the current level of activity (30,000 units)

a.	$45,000
b.	$50,000
c.	$450,000

d. $650,000

10. Suppose ABC COMPANY makes the following changes in its cost structure: variable costs decrease by $15/unit and fixed costs increase 60%. What will be the effect on the breakeven point in units? HINT: Using the original data at 30,000 units, first calculate the old breakeven point.

A. Decrease by 14,400 units

B Decrease by 12,400 units

C. Decrease by 10,400 units

D. Decrease by 8,400 units