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Exercise 5-12 Break-Even and Target Profit Analysis [LO4, LO5, LO6] Reveen...

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Accounting

Exercise 5-12 Break-Even and Target Profit Analysis [LO4, LO5, LO6]

Reveen Products sells camping equipment. One of the companys products, a camp lantern, sells for $120 per unit. Variable expenses are $84 per lantern, and fixed expenses associated with the lantern total $165,600 per month.

If the variable expenses per lantern increase as a percentage of the selling price, will it result in a higher or a lower break-even point? (Assume that the fixed expenses remain unchanged.)
Higher break-even point
Lower break-even point

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