Craylon Manufacturing Produces a Single Product That Sells for $130

Multiple Choice

Craylon Manufacturing produces a single product that sells for $130. Variable costs per unit equal $30. The company expects total fixed costs to be $60,000 for the next month at the projected sales level of 1,200 units. In an attempt to improve performance, management is considering a number of alternative actions. Each situation is to be evaluated separately. Suppose that management believes that a $12,000 increase in the monthly advertising expense will result in a considerable increase in sales. Sales must increase by ________ to justify this additional expenditure.

A) 93 units
B) 120 units
C) 400 units
D) 924 units