Franklin Producers Sells Its Core Product for $8 Per Unit

Franklin Producers sells its core product for $8 per unit and has variable costs of $6 per unit.Total fixed costs are $28,000.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?

A) Decrease from 2,000 units to 1,842 units
B) Decrease from 14,000 units to 4,118 units
C) Increase from 14,000 units to 35,000 units
D) Decrease from 4,667 units to 3,889 units

Correct Answer:

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