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:

Membership Reference Group

A group of people to which an individual belongs or aspires to belong, influencing his or her attitudes, behaviors, and preferences.

Social Comparison

The process of comparing oneself to others in order to evaluate or enhance some aspects of the self.

Dissimilar to Ourselves

Describes things or individuals that are vastly different from our own characteristics, experiences, or beliefs.

Risky Shift

A phenomenon where group decisions tend to be more extreme, often riskier, than the initial inclinations of its individual members.