Lightfoot Company sells its product for $55 and has variable costs of $30 per unit. The total fixed costs are $25,000. 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 increase by 250 units.
B) It will decrease by 250 units.
C) It will decrease by 167 units.
D) It will increase by 167 units.
Correct Answer:
Verified
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