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:

Preterm

The term for babies born before the 37th week of pregnancy.

Cell Division

The process by which a parent cell divides into two or more daughter cells, crucial for growth, reproduction, and repair in living organisms.

Embryo

The early stage of development in multicellular organisms, in humans, it refers to the period from fertilization until the end of the eighth week of gestation, when the being is then referred to as a fetus.

Preterm Birth Rate

The proportion of births that occur before a pregnancy reaches full term, often defined as before 37 weeks of gestation.