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

Costs and cost behaviour — practice question

For a product made by a company, the per-unit data is shown below: Selling price: $100 Direct materials: $40 Direct labour: $30 Fixed costs in total are $40000. The planned output is 1000 units. Which action should the company take to break even?

  • Adecrease direct labour cost by 30%
  • Bdecrease direct material cost by 25%
  • Cincrease direct labour cost by 30%
  • Dincrease direct materials cost by 25%

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