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Dawn Peanut butter and Jelly Sandwiches, Inc. has fixed costs of $90,000. Its product currently sells for $6 per unit and has variable costs of
Dawn Peanut butter and Jelly Sandwiches, Inc. has fixed costs of $90,000. Its product currently sells for $6 per unit and has variable costs of $2.00 per unit. Mr. Jiff, the head of manufacturing, proposes to buy new equipment that will cost $300,000 and drive up fixed costs to $220,000. Although the price will remain set at $6/unit, the increased automation will reduce costs per unit to $1.50. As a result of Jiff's suggestion, will the break-even point go up or down? Compute the necessary numbers to support your
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