Downs Co Sells a Single Product for $20 Per Unit

question 43

Multiple Choice

Downs Co sells a single product for $20 per unit. Fixed costs are $85 000 and variable costs equal 60% of sales. If fixed costs increase by $20 000, Downs Co will have to increase sales by how much just to earn profits equal to those earned before costs increased?

• A) $12 000
• B) $20 000
• C) $42 000
• D) $50 000

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