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Phoenix Company produces a product that has a selling price of $12.00 and a variable cost of $9.00 per unit. The company's fixed costs are
Phoenix Company produces a product that has a selling price of $12.00 and a variable cost of $9.00 per unit. The company's fixed costs are $60,000. The breakeven point in units is 20,000 units. If the variable costs increased by $1.00 (to $10.00 per unit), how will this affect the breakeven point?
A. Fewer units will have to be sold to break even.
B. More units will need to be sold to break even.
C. This will not affect the break-even point; break even number of units will remain at 20,000.
D. Cannot be determined from the information provided.
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