CVP Analysis with Changes in Cost Structure: Stockton Picket Fence Company manufactures prefabricated fence sections that sell at $6 per unit. The present facilities use an older model of semiautomated equipment. Variable costs are $4.50 per unit, and fixed costs total $300,000 per year.

An alternate semiautomated fence machine can be rented. This alternate machine would increase fixed costs to $550,000 per year, but variable costs would be reduced to $3.25 per unit.

Another fence machine supplier offers a fully automatic machine that would result in annual fixed costs of $800.000. However, the fully automatic machine would reduce the variable costs to $2 per unit. There are no other costs or cash flows affected by the choice among these three alternatives.

Management is concerned about the break-even point for operations using each of these machines. Moreover, the sales volume for fence sections is quite erratic. Management is interested in the profit or losses that would occur with each type of equipment if the sales volume were 175,000 units and if the sales volume were 250,000 units.

Required: Prepare a schedule showing the break-even point and the profit or loss obtainable for each equipment alternative at sales volumes of 175.000 and 250,000 units.