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EM Co . has fixed costs of $ 1 , 7 5 0 , 0 0 0 and variable costs are 7 0 % of

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EM Co. has fixed costs of $1,750,000 and variable costs are 70% of revenue. The company's Finance and Accounting unit forecasts revenue of $10,000,000 for the coming period. Fixed costs are not expected to change but the company is willing to incur additional fixed costs to increase capacity if needed. If necessary, the company is considering purchasing additional equipment at a cost of $180,000 to provide extra capacity. How much additional revenue would EM Co. need to earn to justify the additional fixed cost associated with this equipment?
$54,000
$180,000
$200,000
$600,000
None of the above
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