Mae Company sells its product for $12 per unit and has variable costs of $8 per unit

Accounting Mar 05, 2021

Mae Company sells its product for $12 per unit and has variable costs of $8 per unit. Total fixed costs are $60,000. Suppose variable costs increase by 10% due to an increase in the cost of direct materials. What will be the effect on the breakeven point in units?

A) Increase from 15,000 units to 18,750 units

B) Decrease from 3,000 units to 2,885 units

C) Decrease from 15,000 units to 5,357 units

D) Decrease from 7,500 units to 6,818 units

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