Accounting

Forrester Company is considering buying new equipment that would increase monthly fixed costs from $180,000 to $612,000 and would decrease the current variable costs of $90 by $30 per unit. The selling price of $120 is not expected to change. Forrester's current break-even sales are $720,000 and current break-even units are 6,000. If Forrester purchases this new equipment, the revised contribution margin ratio would be: