Forrester Company is considering buying new equipment that would increase monthly fixed costs from $120,000 to $150,000 and would decrease the current variable costs of $70 by $10 per unit. The selling price of $100 is not expected to change. Forrester's current break-even sales are $400,000 and current break-even units are 4,000. If Forrester purchases this new equipment, the revised break-even point in units would: Multiple Choice Increase by 250. Decrease by 250. Increase by 12,000. Decrease by 8,000. Increase by 8,000.
Forrester Company is considering buying new equipment that would increase monthly fixed costs from $120,000 to $150,000 and would decrease the current variable costs of $70 by $10 per unit. The selling price of $100 is not expected to change. Forrester's current break-even sales are $400,000 and current break-even units are 4,000. If Forrester purchases this new equipment, the revised break-even point in units would: Multiple Choice Increase by 250. Decrease by 250. Increase by 12,000. Decrease by 8,000. Increase by 8,000.
Chapter3: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 5PA: Kylies Cookies is considering the purchase of a larger oven that will cost $2,200 and will increase...
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