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Business
Accounting
Flying Cloud Co. has the following operating data for its manufacturing operations: Unit selling price $       250 Unit variable cost 100 Total fixed costs 840,000 ​ The company has decided to increase the wages of hourly workers which will increase the unit variable cost by 10%. Increases in the salaries of factory supervisors and property taxes for the factory will increase fixed costs by 4%. If sales prices are held constant, the next break-even point for Flying Cloud Co. will be

Flying Cloud Co. has the following operating data for its manufacturing operations: Unit selling price $       250 Unit variable cost 100 Total fixed costs 840,000 ​ The company has decided to increase the wages of hourly workers which will increase the unit variable cost by 10%. Increases in the salaries of factory supervisors and property taxes for the factory will increase fixed costs by 4%. If sales prices are held constant, the next break-even point for Flying Cloud Co. will be

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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  1. Flying Cloud Co. has the following operating data for its manufacturing operations:

    Unit selling price

    $       250
    Unit variable cost

    100
    Total fixed costs

    840,000

    ​

    The company has decided to increase the wages of hourly workers which will increase the unit variable cost by 10%. Increases in the salaries of factory supervisors and property taxes for the factory will increase fixed costs by 4%. If sales prices are held constant, the next break-even point for Flying Cloud Co. will be

      a.
    increased by 800 units
      b.
    increased by 640 units
      c.
    decreased by 640 units
      d.
    increased by 400 units
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