Grosheim Incorporated has fixed expenses of $212,500 per year

Grosheim Incorporated has fixed expenses of $212,500 per year. Right now, Grosheim Incorporated is selling its products for $125 per unit. Management is contemplating a 25% increase in the selling price for the next year. Variable costs are currently 40% of sales revenue and are not expected to change in dollar amount on a per unit basis next year (the company will pay the same amount for variable costs next year).

If fixed costs increase 10% next year, and the new selling price per unit goes into effect, how many units will need to be sold to breakeven?

A) 1,133 units

B) 2,877 units

C) 233,750 units

D) 2,200 units