Mosaic Tile Company Has Estimated the Following Amounts for Its

question 1

Multiple Choice

Mosaic Tile Company has estimated the following amounts for its next fiscal year: $$\begin{array} { | l | r } \text { Total fixed costs } & \$ 832,000 \\\hline \text { Sales price per unit } & 44 \\\hline \text { Variable costs per unit } & 20 \\\hline\end{array}$$ What will happen to the breakeven point (in units) if Mosaic can reduce fixed costs by $22,000? (Round your answer up to the nearest whole unit.)

• A) The breakeven point will decrease by 917 units.
• B) The breakeven point will decrease by 1100 units.
• C) The breakeven point will increase by 1100 units.
• D) The breakeven point will increase by 500 units.

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Definitions:

Second-Degree Price Discrimination

A pricing strategy where prices vary based on the quantity of goods or services purchased, but not on the characteristics of the buyer.

Early Bird

A term typically used to describe someone who completes a task or arrives somewhere early, often to take advantage of benefits or discounts.

Intertemporal Price Discrimination

A pricing strategy where consumers are charged different prices for the same product or service based on when they choose to purchase or consume it.

Marginal Revenue

The additional income earned by selling one more unit of a good or service.