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

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Definitions:

Trust

The firm belief in the reliability, truth, ability, or strength of someone or something.

Cooperation

Working together toward a common goal or benefit.

Trust

The confidence in the honesty, integrity, and reliability of a person or system.

Commons Dilemma

A situation in which individuals' short-term self-interest conflicts with long-term group interest and well-being, often related to the consumption of shared resources.