Sutton Company Produces Flash Drives for Computers, Which It Sells

question 89

Multiple Choice

Sutton Company produces flash drives for computers, which it sells for $20 each.Each flash drive costs $6 of variable costs to make.During April, 1,000 drives were sold.Fixed costs for April were $4.20 per unit for a total of $4,200 for the month.If variable costs decrease by 10%, what happens to the break-even level of units per month for Sutton Company?

• A)It is 10% higher than the original break-even point.
• B)It decreases about 12 units.
• C)It decreases about 30 units.
• D)It depends on the number of units the company expects to produce and sell.

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Definitions:

Data

Information collected for reference or analysis, often numeric, and used for decision-making or research.

Scatterplot

A type of diagram using Cartesian coordinates to display values for typically two variables for a set of data, showing how much one variable is affected by another.

Points

In various contexts, it can represent units of measurement, positions on a graph, or specific values or rewards in games and programs.

Leverage

In statistics, the influence a single data point has on the overall outcome of a regression analysis.