Drenning Timber Products Has Estimated the Following Amounts for Its

question 11

Multiple Choice

Drenning Timber Products has estimated the following amounts for its next fiscal year: $$\begin{array} { | l | r | } \hline \text { Total fixed expenses } & \$ 834,500 \\\hline \text { Sale price per unit } & 41 \\\hline \text { Variable expenses per unit } & 30 \\\hline\end{array}$$ What will happen to the breakeven point (in units) if Drenning can reduce fixed expenses by $22,500?

• A) The breakeven point will decrease by 2,046 units.
• B) The breakeven point will decrease by 549 units.
• C) The breakeven point will decrease by 750 units.
• D) The breakeven point will increase by 549 units.

---

Definitions:

Segment Expenses

Costs that are directly associated with specific divisions or operational segments of a company.

Profit

The financial benefit that is realized when the amount of revenue gained from a business activity exceeds the expenses, costs, and taxes associated with the activity.

Loss

An accounting term that represents the excess of expenses over revenues in a specific period, leading to a decrease in equity.

Disaggregation

Disaggregation involves breaking down financial information or data into smaller, more detailed components, often for analytical purposes.