Franklin Producers Sells Its Core Product for $5 Per Unit

Franklin Producers sells its core product for $5 per unit and has variable costs of $3 per unit. Total fixed costs are $22,000. Suppose variable costs increase by 30% due to an increase in the cost of direct materials. What will be the effect on the breakeven point in units?

A) Decrease from 2750 units to 2472 units
B) Decrease from 11,000 units to 3143 units
C) Increase from 11,000 units to 20,000 units
D) Decrease from 7333.33333 units to 5642 units

Correct Answer:

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