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High Technology Co is considering two proposed alternative production methods for its new product, which are Plan A and Plan B. Information about sales and

High Technology Co is considering two proposed alternative production methods for its new product, which are Plan A and Plan B. Information about sales and costs for each plan as shown in the following table:

Plan A

Plan B

Price per unit

$4.0

$4.0

Variable cost per unit

$3.0

$2.0

Fixed cost per year

$50,000

$140,000

Expected units sold (units)

100,000

100,000

What are the percentage changes in EBIT of Plan A and EBIT of Plan B resulting from one percent change in units sold from 100,000 units?

Select one:

a.4.0% for Plan A and 1.43% for Plan B

b.2.00% for Plan A and 3.33% for Plan B

c.1.43% for Plan A and 2.0% for Plan B

d.3.33% for Plan A and 2.00% for Plan B

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