The management accountant at Essex Engineering has prepared the budget for 2003. All managers are concerned about the possibility of recession in Europe. In the last financial year nearly 80% of total output was exported to Europe. Fixed Variable Sales (100,000 units) 1,000,000 Expenses: Raw materials 300,000 Direct labour 200,000 Overhead. 100,000 150,000 Selling and administrative 110,000 50,000 Total expenses 210,000 700,000 910,000 Operating profit 90,000 If fixed expenses increased by 31,500, the break-even sales in units would be:

34,500 units.

80,500 units.

69,000 units.

94,500 units.