Question 1 Compute the break-even point in units. Formula: BEP(units) = Fixed Costs/Unit CM Unit CM = Unit Sales Price - Unit Variable Cost = 3,000 - 2,000 = $1,000 BEP(units) = 4,000,000 / 1,000 = 4,000 units Question 2 What will the new break-even point be if fixed costs increase by 10 percent? If fixed costs increase by 10% they become 4,400,000. (4,000,000 + 10%*4,000,000) New BEP(units) = 4,400,000/1,000 = 4,400 units