Multiple Choice
A manufacturer contemplates a change in technology that would reduce fixed costs from $800,000 to $600,000, and reduce depreciation expense from $125,000 to $100,000.However, the ratio of variable costs to sales will increase from 68 percent to 80 percent.What will happen to break-even level of revenues?
A) a reduction to the level of $875,000
B) a reduction to the level of $2,890,625
C) an increase to the level of $3,500,000
D) an increase to the level of $3,625,000
Correct Answer:
Verified
Correct Answer:
Verified
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