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Richland Enterprises has budgeted the following amounts for its next fiscal year Total fixed expenses Selling price per unit
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Answer #1

Reduction in the break-even sales in units

Reduction in the break-even sales in units = Decrease in fixed costs / Contribution margin per unit

= Decrease in fixed costs / (Selling price per unit – Variable cost per unit)

= $4,080 / ($40.00 per unit - $10.00 per unit)

= $4,080 / $30.00 per unit

= 136 units

Therefore, the Reduction in the break-even sales in units will be “Decrease by 136 units”

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