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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

Accounting

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

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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