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Question
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:A.Increase by 250.
B.Decrease by 250.
C.Increase by 12,000.
D.Decrease by 8,000.
E.Increase by 8,000.
Answer
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