Fixed Costs Including Depreciation Have Increased at Leverage Inc

question 10

Multiple Choice

Fixed costs including depreciation have increased at Leverage Inc.,from $4 million to $5.3 million.Suppose that the company now breaks even on an accounting basis with sales of $20 million.What must be the break-even variable cost as a percentage of sales?

• A) 69.2%
• B) 65.8%
• C) 73.5%
• D) 76.7%