Flow Industries is planning on purchasing a new piece of equipment that will increase the quality of

Question:

Flow Industries is planning on purchasing a new piece of equipment that will increase the quality of its production. It hopes the increased quality will generate more sales. The company’s ratio is 50%, and its current breakeven point is $ 500,000 in sales revenue. If Flow Industries’ fixed expenses increase by $ 50,000 due to the equipment, what will its new breakeven point be (in sales revenue)?

Contribution Margin
Contribution margin is an important element of cost volume profit analysis that managers carry out to assess the maximum number of units that are required to be at the breakeven point. Contribution margin is the profit before fixed cost and taxes...