Compute break-even point-proposed new break-even point units

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Reference no: EM131287145

Shawn Pen & Pencil Sets Inc. has fixed costs of $500,200. Its product currently sells for $22 per unit and has variable costs of $9.80 per unit. Mr. Bic, the head of manufacturing, proposes to buy new equipment that will cost $480,000 and drive up fixed costs to $640,500. Although the price will remain at $22 per unit, the increased automation will reduce costs per unit to $6.75.

a. Compute the following break-even points. (Do not round intermediate calculations. Round your answers to the nearest whole number.)

Current break-even point units

Proposed new break-even point units

Reference no: EM131287145

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