Fantasmas Incorporated Had the Following Information Suppose Fantasmas Could Reduce Setup Costs by $300 Per Setup

question 125

Multiple Choice

Fantasmas Incorporated had the following information: $\begin{array}{lrr}\text { Activity Driver } & \text { Unit Variable Cost } & \text { Level of Activity Drive } \\\text { Units sold } & \$ 20&-- \\\text { Setups } & 1,200 &60\\\text { Engineering hours } & 52&1,500\\\\\text { Other data: }\\\text { Total fixed costs (traditional) } & \$ 600,000 \\\text { Total fixed costs }(A B C) & \$ 360,000 \\\text { Unit selling price } & \$60\end{array}$
Suppose Fantasmas could reduce setup costs by $300 per setup and could reduce the number of engineering hours needed to 1,400 hours. How many units must be sold to break even in this case?

• A)7,243 units
• B)24,340 units
• C)12,170 units
• D)8,554 units

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