Foggy CoHas the Following Operating Data for Its Manufacturing Operations

question 113

Multiple Choice

Foggy Co.has the following operating data for its manufacturing operations: $$\begin{array} { l r } \text { Unit selling price } & \$ 250 \\\text { Unit variable cost } & \$ 100 \\\text { Total fixed costs } & \$ 840,000\end{array}$$ ? The company has decided to increase the wages of hourly workers, which will increase the unit variable cost by 10%.Increases in the salaries of factory supervisors and property taxes for the factory will increase fixed costs by 4%.If sales prices are held constant, the break-even point for Foggy Co.will:

• A) increase by 400 units.
• B) increase by 640 units.
• C) decrease by 640 units.
• D) increase by 800 units.

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Definitions:

Productivity Workers

Employees whose output per period of time increases due to improvements in technology or work methods.

Labor Demand

The quantity of workers that employers are willing and able to hire at a given wage rate, reflecting businesses' need for labor.

Labor Supply

The total hours that workers are willing and able to work at a given wage rate, in a given period.

College Degree

A formal certificate or title awarded by an educational institution signifying the completion of a specific course of study at a college or university level.