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:

Question

Quizplus · Accepted Answer

The decrease in variable costs per unit and increase in fixed costs will result in a lower break-even point in units.

Forrester Company Is Considering Buying New Equipment That Would Increase