Question
Clinton Manufacturing made 534,000 units of its product and sold them for $84 per unit in 20X1. Variable costs per unit are $23 (which are
Clinton Manufacturing made 534,000 units of its product and sold them for $84 per unit in 20X1. Variable costs per unit are $23 (which are largely labor costs), and total fixed costs are $1,385,000.
Clintons manufacturing process above is labor intensive, but Clintons CEO is considering a change in the way products are manufactured by going to a machine-based system, increasing fixed costs to a total of $4,957,398 per year, rather than $1,385,000 above. If Clinton did go through with the change, variable costs per unit would decrease to $22 per unit. Clinton expects to maintain the same level of sales, production, and selling price. Clintons CEO will decide on the new machinery based only on which is more profitable.
Question: What is the new breakeven revenue of Clinton makes the change to the machine-based system? Round intermediate steps to 2 decimal places. Round your final answer to the nearest dollar.
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