Andersen Electronics manufactures a product that sells for $100 per unit. Variable cost per unit is $60 and fixed costs per period are $120,000. If Andersen decreases variable costs by 5%, the company's break-even point in units would

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The original variable cost is $60, and a 5% decrease makes it $57. The contribution margin per unit increases from $40 to $43. The break-even point is fixed costs divided by the contribution margin per unit. The original break-even point is 3,000 units ($120,000 / $40), and the new break-even point is approximately 2,791 units ($120,000 / $43). The decrease is 209 units (3,000 - 2,791).

Andersen Electronics Manufactures a Product That Sells for $100 Per