Accounting 9706 · AS & A Level · Costs and cost behaviour

Costs and cost behaviour — practice question

A company has the following budgeted figures for May. Selling price (per unit): $120 Variable costs (per unit): $80 Total fixed costs: $56000 The company plans to purchase a new machine that will cut the variable costs by 20% and raise fixed costs by 20%. What is the change in break-even sales in units?

  • Aincrease by 200 units
  • Bdecrease by 200 units
  • Cincrease by 700 units
  • Ddecrease by 700 units

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