Exercise A

Barney Company makes and sells stuffed animals.  One product, Michael Bears, sells for $28 per bear.  Michael Bears have fixed costs of $100,000 per month and a variable cost of $12 per bear.  Howe many Michael Bears must be produced and sold each month to break even?

Exercise B

What is meant by the term break-even point? What are two ways in which the break-even point can be expressed? What is the relevant range?