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Problem - Currently, the unit selling price of a product is $7,520, the unit variable cost is $4,400, and the total fixed costs are $23,400,000. A proposal is being evaluated to increase the unit selling price to $8,000.
Required -
a. Compute the current break-even sales (units).
b. Compute the anticipated break-even sales (units), assuming that the unit selling price is increased and all costs remain constant.
Who are the stakeholders in this situation? What are the ethical issues involved in this situation? What would you do if you were Wayne Terrago?
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