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Question 1: Mayo Enterprise has fixed cost of $120,000. At sales volume of $400,000, return on sales is 10%; at a $600,000 volume, return on sales is 20%. What is the break-even volume?
a. $300,000
b. $160,000
c. $350,000
d. $210,000
What other factors does the firm's manager need to consider in making the decision? Based on a relevant-cost analysis, should the firm install the new tracking system? Show calculations.
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