Franklin Producers Sells Its Core Product for $8 Per Unit

question 235

Multiple Choice

Franklin Producers sells its core product for $8 per unit and has variable costs of $6 per unit.Total fixed costs are $28,000.Suppose variable costs increase by 20% due to an increase in the cost of direct materials.What will be the effect on the breakeven point in units?

• A)Decrease from 2,000 units to 1,842 units
• B)Decrease from 14,000 units to 4,118 units
• C)Increase from 14,000 units to 35,000 units
• D)Decrease from 4,667 units to 3,889 units

---

Definitions:

Interact

The act of two or more entities acting on or influencing each other, commonly used in social, biological, and technological contexts.

Resources Exchange Web

A conceptual framework for understanding the complex interactions and exchanges of materials and energy between organisms within an ecosystem.

Heat Waste

Unwanted or unusable heat energy produced by industrial processes or energy production, which is often released into the environment.

Power Plants

Industrial facilities where electricity is generated from primary energy sources, such as coal, natural gas, nuclear, solar, or wind energy, through various technological processes.