QUESTION 3

A company increased the selling price for its product from $1.00 to $1.10 a unit when total fixed costs increased from $400,000 to $480,000 and the variable cost per unit remained unchanged at $0.50. How would these changes affect the break-even point in units?

The break-even point in units would remain unchanged.

The break-even point in units would decrease.

The break-even point in units would increase.

The effect cannot be determined from the information given.