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Beloit Corporation has the following information related to its manufacturing and selling of computer back-up hard drives. Current selling price, per unit $80.00 Direct materials,
Beloit Corporation has the following information related to its manufacturing and selling of computer back-up hard drives. Current selling price, per unit $80.00 Direct materials, per unit $15.00 Direct labor, per unit $5.00 Variable manufacturing overhead, per unit $10.00 Fixed manufacturing overhead $200,000 Fixed operating expenses $50,000 Analysts compute the breakeven point using the above information, and conclude that production capacity and estimated sales can reach that point. However, a few days later, the analyst learns that variable costs will increase by 5%. What is the effect on the original breakeven point of this change? 0 An increase of 110 drives O A decrease of 155 drives 0 An increase of 5% O An increase of 283 drives 0 A decrease of 283 drives O An increase of 155 drives
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