Question

Heartlake Enterprises management has budgeted the following amounts for its next fiscal year. Total fixed expenses Selling price per unit Variable expenses per unit $54,800 $21 $20 If Heartlake Enterprises can reduce fixed expenses by $1,400, how will breakeven sales in units be affected? O A. Decrease by 1,400 units O B. Increase by 34 units O C. Increase by 1,400 units OD. Decrease by 34 units Click to select your answer.

Answer 1

Correct answer--------(A) Decrease by $ 1400

Working

		Current	Change	Breakeven unit change
A	Sale Price per unit	$            21.00	$            21.00
B	Variable Cost per Unit (12+3)	$            20.00	$            20.00
C=A x B	Unit Contribution	$              1.00	$               1.00
D	Fixed Cost	$   54,800.00	$    53,400.00
E	Breakeven units	54,800	53,400	1,400