Franklin Producers sells its core product for $9 per unit and has variable costs of $7 per unit. Total fixed costs are $26,000. Suppose variable costs increase by 20% due to an increase in the cost of direct materials. What will be the effect on the breakeven point in units? O A. Decrease from 1,625 units to 1,495 units O B. Decrease from 3,714.2857 units to 3,096 units O C. Increase from 13,000 units to 43,334 units O D. Decrease from 13,000 units to 2,364 units

Franklin Producers sells its core product for $9 per unit and has variable costs of $7 per unit. Total fixed costs are $26,000. Suppose variable costs increase by 20% due to an increase in the cost of direct materials. What will be the effect on the breakeven point in units? O A. Decrease from 1,625 units to 1,495 units O B. Decrease from 3,714.2857 units to 3,096 units O C. Increase from 13,000 units to 43,334 units O D. Decrease from 13,000 units to 2,364 units

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter7: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 46E: Lotts Company produces and sells one product. The selling price is 10, and the unit variable cost is...

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