Question
Carla Vista Company produces a single product. It sold 88,500 units last year with the following results: Sales Variable costs Fixed costs Operating income
Carla Vista Company produces a single product. It sold 88,500 units last year with the following results: Sales Variable costs Fixed costs Operating income before taxes Income taxes (45%) Operating income $2,212,500 $885,000 354,000 1,239,000 973.500 438,075 $535,425 In an attempt to improve its product, Carla Vista is considering replacing a component part in its product that has a cost of $5 per unit with a new and better part costing $10 per unit during the coming year. A new machine would also be needed to increase plant capacity. The machine would cost $106,200, with a useful life of six years and no salvage value. The company uses straight-line depreciation on all plant assets. What was Carla Vista's break-even point in units last year? Break-even point 23000 unite
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