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

Costs and cost behaviour — practice question

A company has the budgeted figures below for May: - Selling price per unit: $120 - Variable costs per unit: $80 - Total fixed costs: $56000 The company plans to purchase a new machine, which will cut variable costs by 20% while raising fixed costs by 20%. What change will there be 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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