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23 Nov 2019
Problem 5-6 Break-even analysis [LO2]
Jay Linoleum Company has fixed costs of $356,000. Its product currently sells for $15 per unit and has variable costs per unit of $7.00. Mr. Thomas, the head of manufacturing, proposes to buy new equipment that will cost $410,000 and drive up fixed costs to $490,000. Although the price will remain at $15 per unit, the increased automation will reduce variable costs per unit to $5.00.
(a) Compute the following break-even points?
Break-even point (before) units
Break-even point (after) units
(b) As a result of Thomas
Problem 5-6 Break-even analysis [LO2]
Jay Linoleum Company has fixed costs of $356,000. Its product currently sells for $15 per unit and has variable costs per unit of $7.00. Mr. Thomas, the head of manufacturing, proposes to buy new equipment that will cost $410,000 and drive up fixed costs to $490,000. Although the price will remain at $15 per unit, the increased automation will reduce variable costs per unit to $5.00.
(a) Compute the following break-even points?
Break-even point (before) units
Break-even point (after) units
(b) As a result of Thomas
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Lelia LubowitzLv2
16 Nov 2019
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