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.

---

Definitions:

Accidents

Unforeseen and unplanned events that result in damage or injury, occurring without the intent of the involved parties.

Productive

Having the capability or efficiency to produce a significant quantity of output, results, or progress.

Electroencephalograph (EEG)

A device used to record the electrical activity of the brain, often used in the diagnosis of neurological conditions and the study of brain function.

Delta Waves

Slow, high-amplitude brainwaves associated with the deepest stages of sleep and relaxation, playing a role in brain health and functioning.