Sequoah Company sells its product for $60 and has variable costs of $34 per unit. The total fixed costs are $30,000. What will be the effect on the breakeven point in units if variable costs increase by $5 due to an increase in the cost of direct materials?

A.

It will decrease by

187

units.

B.

It will increase by

187

units.

C.

It will decrease by

275

units.

D.

It will increase by

275

units.