Franklin Producers Sells Its Core Product for $5 Per Unit

question 273

Multiple Choice

Franklin Producers sells its core product for $5 per unit and has variable costs of $3 per unit. Total fixed costs are $22,000. Suppose variable costs increase by 30% due to an increase in the cost of direct materials. What will be the effect on the breakeven point in units?

• A)Decrease from 2750 units to 2472 units
• B)Decrease from 11,000 units to 3143 units
• C)Increase from 11,000 units to 20,000 units
• D)Decrease from 7333.33333 units to 5642 units

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