Bolger and Co. manufactures large gaskets for the turbine industry. Bolgers per unit sales price and variable costs for the current year are as follows: Sales price per unit $600 Variable costs per unit $420 Bolgers total fixed costs are $720,000. As Bolgers labor agreement is expiring at the end of the year, management is concerned about the effect a new agreement will have on its unit break-even point. If a new labor agreement resulted in an increase in direct labor costs of $40 per unit and a decrease in total fixed costs by $20,000, the companys break-even point would:
Increase by 1,000 units.
Increase by 125 units.
Increase by 375 units.
Increase by 500 units.