Southwest Industries sells its finished product for US$9 per unit. Its fixed operating costs are US$20,000, and the variable operating cost per unit is US$5.

a. Calculate the firm's earnings before interest and taxes (EBIT) for sales of 10,000 units.

b. Calculate the firm's EBIT for sales of 8,000 and 12,000 units, respectively.

c. Calculate the percentage changes in sales (from the 10,000-unit base level) and associated percentage changes in EBIT for the shifts in sales indicated in part b.

d. On the basis of your findings in part c, comment on the sensitivity of changes in EBIT in response to changes in sales.