A Manufacturer Contemplates a Change in Technology That Would Reduce

question 42

Multiple Choice

A manufacturer contemplates a change in technology that would reduce fixed costs from $800,000 to $600,000,and reduce depreciation expense from $125,000 to $100,000.However,the ratio of variable costs to sales would increase from 68% to 80%.What would be the change in the break-even level of revenues?

• A) Increase of $609,375
• B) Increase of $574,750
• C) Decrease of $211,250
• D) Decrease of $341,675

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Definitions:

Economic Status

The position of an individual, household, or group within the economic hierarchy, often assessed by income, wealth, and access to resources and opportunities.

Multilateral Transfer

The transfer of resources (financial, goods, services) between multiple countries or parties without direct reciprocation.

Developing Country

A nation with a lower level of industrialization, a lower standard of living, and a lower Human Development Index (HDI) compared to developed countries.

World Bank

An international financial institution that provides loans and grants to the governments of poorer countries for the purpose of pursuing capital projects.