Question
Lincoln Corporation produces and sells two produtcs : Standard and Deluxe. The info on the two products sold for the last month is given below.
Lincoln Corporation produces and sells two produtcs : Standard and Deluxe. The info on the two products sold for the last month is given below. The common fixed cost is $15,000. Standard : Sales : $45,000 Variable Expenses : $36,000 Deluxe : Sales : $33,000 Variable Expenses : $16,500 Suppose total sales reveue for the coming month stays the same, but the sales (revenue) mix changes such that Deluxe increases by 20% (i.e. additional 20% to current %) and Standard decreases by 20% from the present levels. What will be the impact of this change on the break even sales revenue of Lincoln?
A. Break-even sales revenue will stay the same.
B. Break-even sales revenue will increase by $15882
C. Break-even sales revenue will decrease by $15882
D. Break-even sales revenue will increase by $ 7115
E. Break-even sales revenue will decrease by $7115
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