Allied Inc. is considering the purchase of a new piece of equipment. Relevant data are shown below.
$$\begin{array} { l r }
\text { Annual Fixed Cost } & \$ 700,000 \
\text { Variable Cost per Unit } & \$ 750 \
\text { Revenue per Unit } & \$ 200
\end{array}$$
a.Using this information, determine the break-even volume.
b.If the anticipated demand for the product is 5,000 units, should Allied purchase the new equipment?

Question

Allied Inc. is considering the purchase of a new piece of equipment. Relevant data are shown below.
 $$\begin{array} { l r } 
\text { Annual Fixed Cost } & \$ 700,000 \
\text { Variable Cost per Unit } & \$ 750 \
\text { Revenue per Unit } & \$ 200
\end{array}$$ 
a.Using this information, determine the break-even volume.
b.If the anticipated demand for the product is 5,000 units, should Allied purchase the new equipment?

Quizplus · Accepted Answer

The Answer of Allied Inc. is considering the purchase of a new piece of equipment. Relevant data are shown below.
 $$\begin{array} { l r } 
\text { Annual Fixed Cost } & \$ 700,000 \
\text { Variable Cost per Unit } & \$ 750 \
\text { Revenue per Unit } & \$ 200
\end{array}$$ 
a.Using this information, determine the break-even volume.
b.If the anticipated demand for the product is 5,000 units, should Allied purchase the new equipment?

Allied Inc AUsing This Information, Determine the Break-Even Volume