Lightfoot Company Sells Its Product for $55 and Has Variable

question 46

Multiple Choice

Lightfoot Company sells its product for $55 and has variable costs of $30 per unit. Total fixed costs are $25,000. What will be the effect on the breakeven point if variable costs increase by 10% due to an increase in the cost of direct materials?

• A) It will increase by approximately 136 units.
• B) It will increase by approximately 242 units.
• C) It will decrease by approximately 136 units.
• D) It will decrease by approximately 242 units.

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