Evans Company Has Estimated the Following Amounts for Its Next

question 47

Multiple Choice

Evans Company has estimated the following amounts for its next fiscal year: $$\begin{array} { | l | r | } \hline \text { Total fixed expenses } & \$ 832,500 \\\hline \text { Sale price per unit } & 40 \\\hline \text { Variable expenses per unit } & 25 \\\hline\end{array}$$ What will happen to the breakeven point (in units) if Evans can reduce fixed expenses by $22,500?

• A) The breakeven point will decrease by 1,500 units.
• B) The breakeven point will decrease by 562 units.
• C) The breakeven point will decrease by 900 units.
• D) The breakeven point will increase by 562 units.

---

Definitions:

Tack

A small, sharp, pointed nail, often used for fastening materials.

Dorsal Ramus

A branch of a spinal nerve that innervates certain components of the back muscles and the skin of the back.

Dorsal Thorax

The back portion of the chest area, encompassing the region where the rib cage and spine are located.

Sensation

The process and perception of detecting stimuli from the environment through sensory organs and translating it to the brain.