Average Price Washburn Charges for a Guitar Is $349

Multiple Choice

average price Washburn charges for a guitar is $349.This price must cover its variable costs of $25 for direct materials and $120 in direct labor.It must also cover fixed expenses of $38,000.Assuming everything else stays the same,the company's planned move to Nashville,Tennessee,will reduce its fixed costs by $4,800.This would cause total costs to __________ and the break-even quantity to __________.

A) decrease; stay the same
B) decrease; increase
C) increase; increase
D) stay the same; increase
E) decrease; decrease