Mae Company Sells Its Product for $12 Per Unit and Has

question 46

Multiple Choice

Mae Company sells its product for $12 per unit and has variable costs of $8 per unit.Total fixed costs are $60,000.Suppose variable costs increase by 10% due to an increase in the cost of direct materials.What will be the effect on the breakeven point in units?

• A)Increase from 15,000 units to 18,750 units
• B)Decrease from 3,000 units to 2,885 units
• C)Decrease from 15,000 units to 5,357 units
• D)Decrease from 7,500 units to 6,818 units