Lightfoot Company Sells Its Product for $55 and Has Variable

Multiple Choice

Lightfoot Company sells its product for $55 and has variable costs of $30 per unit. Total fixed costs are $25,000. What will be the effect on the breakeven point if variable costs increase by 10% due to an increase in the cost of direct materials?

A) It will increase by approximately 136 units.
B) It will increase by approximately 242 units.
C) It will decrease by approximately 136 units.
D) It will decrease by approximately 242 units.