1. Canvas Reproductions has fixed operating costs of $12,500 and variable operating
costs of $10 per unit and sells its paintings for $25 each. At what level of unit sales
will the company break even in terms of EBIT?
2. The Great Fish Taco Corporation currently has fixed operating costs of $15,000,
sells its premade tacos for $6 per box, and incurs variable operating costs of $2.50
per box. If the firm has a potential investment that would simultaneously raise its
fixed costs to $16,500 and allow it to charge a per-box sale price of $6.50 due to better-
textured tacos, what will the impact be on its operating breakeven point in boxes?
