Payton Industries has fixed costs of $490,000, the unit selling price is $35, and the unit variable costs are $20. The break-even sales (units) if fixed costs are reduced by $40,000 is

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The break-even point in units is calculated by dividing the fixed costs by the contribution margin per unit (selling price per unit - variable cost per unit). If fixed costs are reduced by $40,000, the new fixed costs are $490,000 - $40,000 = $450,000. The contribution margin per unit is $35 - $20 = $15. Therefore, the break-even point is $450,000 / $15 = 30,000 units.

Payton Industries Has Fixed Costs of $490,000, the Unit Selling