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Homework answers / question archive / Claudia Enterprises has budgeted the following amounts for its next fiscal year: Total fixed expenses $48,200 Selling price per unit $60 Variable expenses per unit $30 If Claudia Enterprises can reduce fixed expenses by $12,000, how will breakeven sales in units be affected? A) Decrease by 400 units B) Increase by 133 units C) Increase by 400 units D) Decrease by 133 units
Claudia Enterprises has budgeted the following amounts for its next fiscal year:
Total fixed expenses |
$48,200 |
Selling price per unit |
$60 |
Variable expenses per unit |
$30 |
If Claudia Enterprises can reduce fixed expenses by $12,000, how will breakeven sales in units be affected?
A) Decrease by 400 units
B) Increase by 133 units
C) Increase by 400 units
D) Decrease by 133 units
Answer: A
Explanation: A)
Sales $60.00
Less Variable expenses 30.00
Contribution Margin $30.00
12,000 / $30 CM = 400 decrease in Break Even units