Yemen Company Has the Following Information Available If Variable Costs Increase to $65 Per Unit and Fixed

question 107

Multiple Choice

Yemen Company has the following information available:
$\begin{array} { l } \text {Selling price per unit }&\$100\\ \text {Variable cost per unit }&\$45\\ \text { Fixed costs per year}&\$420,000\\ \text {Expected sales per year (units) }&20,000\\\end{array}$

If variable costs increase to $65 per unit and fixed costs increase by $200,000,what is the break-even point in units?

• A) 11,273
• B) 12,000
• C) 20,000
• D) 17,714

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Definitions:

Milkshakes

A sweet beverage made by blending milk, ice cream, and flavorings or sweeteners such as butterscotch, caramel sauce, or chocolate syrup.

Consumer Surplus

The difference between the total amount that consumers are willing to pay and the total amount that they actually pay.

Demand Curve

A graph showing the relationship between the price of a good and the quantity of the good that consumers are willing and able to purchase at various prices.

Consumer Surplus

The gap in finances between the consumers' ability and willingness to pay versus the real payment for a good or service.