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Clark Company produces flash drives for computers, which it sells for $20 each. Each flash drive costs $6 of variable costs to make. During April,
Clark Company produces flash drives for computers, which it sells for $20 each. Each flash drive costs $6 of variable costs to make. During April, 1,000 drives were sold. Fixed costs for March were $4.20 per unit for a total of $4,200 for the month. If variable costs increase by 10%, what happens to the break-even level of units per month for Clark Company?
A. | It is 10% higher than the original break-even point. | |
B. | It increases about 13 units. | |
C. | It increases about 30 units. | |
D. | It depends on the number of units the company expects to produce and sell. |
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