Jackson Company's operating results for last year are given below:
-If the company's fixed expenses decrease by 20% next year,the break-even point will change from its previous level by:

Question

Jackson Company's operating results for last year are given below: 
-If the company's fixed expenses decrease by 20% next year,the break-even point will change from its previous level by:

Quizplus · Accepted Answer

Unit CM = $40 per unit - $14 per unit = $26 per unit
Fixed expenses = $19,500
Unit sales to break even = Fixed expenses F1F1F1S1F1F1F10 Unit CM = $19,500 F1F1F1S1F1F1F10 $26 per unit = 750 units
Unit CM = $26 per unit
Fixed expenses = (1 - 0.20)F1F1F1S1F1F1F10 $19,500 = $15,600
Unit sales to break even = Fixed expenses F1F1F1S1F1F1F10 Unit CM = $15,600 F1F1F1S1F1F1F10 $26 per unit = 600 units
The break-even point decreases by 150 units.

Jackson Company's Operating Results for Last Year Are Given Below