Benson company produces flash drives for computers which have variable costs of $10 per flash drive to produce. each flash drive sells for $20 each. during the current month, 1,000 flash drives were sold. fixed costs for the current month were $4,500. if variable costs increase by 10%, what happens to the breakeven level in units for the month for benson company?

The answer is: The break even level increases in 50 units.

Explanation:

First we calculate the break even point without the increase in variable costs:

Break even point = fixed costs / contribution margin per unit

                             = $4,500 / ($20 - $10) = 450 units

Then we calculate the new break even point with the increase in variable costs:

New break even point = $4,500 / ($20 - $11) = 500 units

The difference between the new and old break even points is:

= 500 units - 450 units = 50 units

i would go with get a bachelor’s degree

hope i

-lavira : )