Arthur Company Had the Following Data for the Year Just

question 52

Multiple Choice

Arthur Company had the following data for the year just ended:
$\begin{array}{|l|r|}\hline \text { Sales } & 4,000 \text { units } \\\hline \text { Sales price } & \$ 60 \text { per unit } \\\hline \text { Variable cost } & \$ 18 \text { per unit } \\\hline \text { Fixed costs } & \$ 42,000 \\\hline\end{array}$


-If the company's fixed costs decrease by 20% next year,all other factors remaining the same,by how much will the break-even level change compared to that of the current year,rounded to the nearest whole unit?

• A) 200-unit increase.
• B) 440-unit decrease.
• C) 200-unit decrease.
• D) No change in the break-even point.

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Definitions:

Surgeon

A physician who uses hands and medical instruments to diagnose and correct deformities and treat external and internal injuries or disease.

Urologist

A medical doctor specializing in diseases and conditions affecting the urinary system and the male reproductive organs.

Gynecologist

A specialist who performs routine physical care and examinations of the female reproductive system.

Orthopedics

The branch of medicine dealing with the correction of deformities of bones or muscles.