Problems 1) At the breakeven point, fixed cost is always a. less than the contribution margin. b. equal to the contribution margin. c. more than the contribution margin. d. more than the variable cost. 2) CVP analysis is a key factor in many decisions, including choice of product lines, pricing of products, marketing strategy, and use of productive facilities. A calculation used in a CVP analysis is the breakeven point. Once the breakeven point has been reached, operating income will increase by the a. gross margin per unit for each additional unit sold. b. contribution margin per unit for each additional unit sold. c. variable costs per unit for each additional unit sold. d. sales price per unit for each additional unit sold. 3) The following information pertains to Nova Co.'s CVP relationships: Breakeven point in units sold 1,000 Variable costs per unit $500 Total fixed costs $150,000 How much will be contributed to profit before income taxes by the 1,001 st unit sold? 4) Company Y makes a product having variable costs estimated at $4.00 per unit. It sells for $6.00 per unit. Fixed costs for the coming year are estimated to be $130,000. a) How many units must the company sell to generate an operating income of $30,000 ? b) Assume that the actual unit sales were 30% below the level required to earn $50,000 operating income. Under those conditions, the operating income or loss would be