What will happen to the breakeven point (in units) if Mosaic can reduce fixed costs by $22,000? (Round your answer up to the nearest whole unit.)
Mosaic Tile Company has estimated the following amounts for its next fiscal year:
A) The breakeven point will decrease by 917 units.
B) The breakeven point will decrease by 1100 units.
C) The breakeven point will increase by 1100 units.
D) The breakeven point will increase by 500 units.
A) The breakeven point will decrease by 917 units.
Contribution margin (before reduction in fixed expenses) = $44 - $20 = $24
Decrease breakeven point due to reduction in fixed costs = $22,000 / $24 = 917 units
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