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Flanders Manufacturing is considering purchasing a new machine that will reduce variable costs per part produced by $0.15. The machine will increase fixed costs by $18,250 per year. The information they will use to consider these changes is shown here.
Problem A. What will the impact be on the break-even point if Flanders purchases the new machinery?
Problem B. What will the impact be on net operating income if Flanders purchases the new machinery?
Problem C. What would your recommendation be to Flanders regarding this purchase?
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