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Devon Incorporated has fixed expenses of for $100.00 per unit. Management is conte costs are currently 40% of sales revenue a

Devon Incorporated has fixed expenses of for $100.00 per unit. Management is conte costs are currently 40% of sales revenue a

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Devon Incorporated has fixed expenses of $212,000 per year. Right now, Devon Incorporated is selling its products for $100.00 per unit. Management is contemplating a 30% increase in the selling price for the next year. Variable costs are currently 40% of sales revenue and are not expected to change in dollar amount on a per unit basis next year (the company will pay the same amount for variable costs next year). If fixed costs increase 20% next year, and the new selling price per unit goes into effect, how many units will need to be sold to breakeven? (Round answer up to the nearest whole unit.) OA. 1,496 units B. 2,120 units C. 2,827 units OD. 254,400 units
Transcribed Image Text:Devon Incorporated has fixed expenses of $212,000 per year. Right now, Devon Incorporated is selling its products for $100.00 per unit. Management is contemplating a 30% increase in the selling price for the next year. Variable costs are currently 40% of sales revenue and are not expected to change in dollar amount on a per unit basis next year (the company will pay the same amount for variable costs next year). If fixed costs increase 20% next year, and the new selling price per unit goes into effect, how many units will need to be sold to breakeven? (Round answer up to the nearest whole unit.) OA. 1,496 units B. 2,120 units C. 2,827 units OD. 254,400 units
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