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Kent Co. manufactures a product that sells for $52.00. Fixed costs are $270,000 and variable...

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Accounting

Kent Co. manufactures a product that sells for $52.00. Fixed costs are $270,000 and variable costs are $25.00 per unit. Kent can buy a new production machine that will increase fixed costs by $12,000 per year, but will decrease variable costs by $3.00 per unit. What effect would the purchase of the new machine have on Kent's break-even point in units?

600 unit decrease

5,678 unit increase

No effect on the break-even point in units

6,442 unit decrease

600 unit increase

Answer & Explanation Solved by verified expert
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