Fixed costs for setting up production-breakeven volume

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Reference no: EM13785921

A company is considering producing an item that can be sold for $380 per unit. The fixed costs for setting up production are $225,000 and the variable cost per unit for the item using current materials is estimated to be $350. If the company is able to reduce its variable cost by $20 per unit then its breakeven volume would

increase from 4,500 units to 7,500 units

decrease from 7,500 units to 4,500 units

decrease from 4,500 units to 593 units

increase from 593 units to 4,500 units

remain the same

Reference no: EM13785921

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