Question
Coronado Company produces flash drives for computers, which it sells for $20 each. Each flash drive costs $10 of variable costs to make. During April,
Coronado Company produces flash drives for computers, which it sells for $20 each. Each flash drive costs $10 of variable costs to make. During April, 1100 drives were sold. Fixed costs for April were $6 per unit for a total of $6600 for the month. If variable costs decrease by 20%, what happens to the break-even level of units per month for Coronado Company?
A.It is 20% higher than the original break-even point.
B.It decreases about 110 units.
C.It decreases about 132 units.
D.It depends on the number of units the company expects to produce and sell.
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