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What effect would the purchase of the new machine

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Question 1: Mullis Corp. manufactures DVDs that sell for $5.40. Fixed costs are $38,000 and variable costs are $3.80 per unit. Mullis can buy a newer production machine that will increase fixed costs by $9,500 per year, but will decrease variable costs by $0.40 per unit. What effect would the purchase of the new machine have on Mullis' break-even point in units?

Multiple Choice

Option 1: 4,750 unit increase.

Option 2: 12,259 unit decrease.

Option 3: 5,938 unit increase.

Option 4: No effect.

Option 5: 4,750 unit decrease.

Reference no: EM132559285

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