Use the Following to Answer Questions

question 96

Multiple Choice

Use the following to answer questions
Ogallah Inc. sells its product for $9.25 per unit. The variable costs per units are $2.50 and total fixed costs are $452,250. If Ogallah buys new software for the production process at a cost of $55,250, variable costs will be reduced by 20%.
-If Ogallah raised the selling price of its product,what effect would that have on the breakeven point prior to and after the purchase of the computer,respectively?

• A)decrease/decrease
• B)increase/increase
• C)decrease/increase
• D)increase/decrease

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Definitions:

Account

A record used to keep track of and summarize financial transactions within a specific category, such as sales, expenses, or assets.

Accounting Record

Documentation and entries that capture financial transactions and positions within an entity.

Specific Item

Refers to a unique or distinctly identified item within an inventory or accounting context.

Chart of Accounts

An organizational tool that lists all the accounts in a company's general ledger, categorizing financial transactions into specific classes for reporting and analysis purposes.