Keene, Inc.produces flash drives for computers, which it sells for $20 each.Each flash drive costs $6 of variable costs to make.During March, 1,000 drives were sold.Fixed costs for March were $4.90 per unit for a total of $4,900 for the month.If variable costs decrease by 10%, what happens to the break-even level of units per month for Keene?
A)It is 10% higher than the original break-even point.
B)It decreases about 14 units.
C)It decreases about 35 units.
D)It depends on the number of units the company expects to produce and sell.

Question

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The Answer of Keene, Inc.produces flash drives for computers, which it sells for $20 each.Each flash drive costs $6 of variable costs to make.During March, 1,000 drives were sold.Fixed costs for March were $4.90 per unit for a total of $4,900 for the month.If variable costs decrease by 10%, what happens to the break-even level of units per month for Keene?
A)It is 10% higher than the original break-even point.
B)It decreases about 14 units.
C)It decreases about 35 units.
D)It depends on the number of units the company expects to produce and sell.