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Use the following information for questions 1 through 8 Gain Co. makes a product that sells for $60 a unit. Variable costs to produce a unit are $20. Gain Co.'s fixed costs are $360,000. 1) How many units must Gain Co. sell to break even? A) 60,000 B) 6.000 C) 9,000 D) 90,000 2) Gain Co's breakeven sales are: A) $5,400,000 B) $540,000 C) $360,000 D) $54,000 3) How many units must Gain Co. sell to earn $150,000 operating income? A) 12,750 B) 127,500 C) 1,275 D) 2,500 4) How much operating income would Gain Co. earn if they sold 14,000 units? A) $150,000 loss B) $250,000 C) $2,000,000 loss D) $200,000 5) How much operating income would Gain Co. eam if they sold 7,500 units? A) $60,000 B) $50,000 loss C) $60,000 loss D) $600,000 6) How would Gain Co's breakeven change if they increased the selling price by $10 ? A) They would need 1,300 fewer units to reach breakeven B) They would need 1,800 fewer units to reach breakeven C) They would need 1,300 more units to reach breakeven D) They would need 1,200 more units to reach breakeven 7) How would Gain Co's breakeven change if they reduced the selling price by $10 ? A) They would need 30,000 more units to reach breakeven B) They would need 300 more units to reach breakeven C) They would need 3,000 more units to reach breakeven D) They would need 3,000 fewer units to reach breakeven 8) Gain is considering a new process that would reduce the variable costs per unit by $5 by using increased automation, The additional machinery required would increase fixed costs by $22,500. Would you recommend making the change? A) No, breakeven would be 500 units higher B) No, adding to fixed costs is always inadvisable C) Yes, the breakeven would be reduced by 500 units D) Yes, the breakeven would be reduced by 1,000 units

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