a. Given the graphs shown at the top of the next page, calculate the total fixed costs, variable costs per unit, and sales price for Firm A. Firm B's fixed costs are $120,000, its variable costs per unit are $4, and its sales price is $8 per unit.

b. Which firm has the higher operating leverage at any given level of sales? Explain.

c. At what sales level, in units, do both firms earn the same operating profit?

Firm A Firm B Revenues and Costs (Thousands of Dollars) Revenues and Costs Thousands of Dollars) Total Revenues Total Costs Total Revenues Total Costs 240 Breakeven Point 200 200 Breakeven Point 160 160 Fixed Costs 120 120 Fixed Costs 10 20 25 30 50 10 30 50 Units (Thousands) Units (Thousands)