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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Definitions:

Extinction

Discourages a behaviour by making the removal of a desirable consequence contingent on its occurrence.

Continuous Reinforcement

A learning theory concept where a behavior is reinforced every time it is exhibited, leading to fast learning but rapid extinction without reinforcement.

Desired Behaviour

A specific set of actions or reactions that an organization or individual aims to elicit from another party, often through reinforcement or incentives.

Reward

A benefit, often in the form of compensation, recognition, or appreciation, given to individuals for their performance or achievements.