Empire Industries is planning on purchasing a new piece of equipment that will increase the quality of its production. It hopes the increased quality will generate more sales. The$$ company's contribution margin ratio is $50\%,$ and its current breakeven point is $ $250$ comma $000$ in sales revenue. If the$$ company's fixed expenses increase by $ $45$ comma $000$ due to the$$ equipment, what will its new breakeven point be$($in sales$$ revenue$)?$

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Part $1$

If Empire $$Industries$\text{'}$ fixed expenses increase by $ $45$ comma $000$ due to the$$ equipment, what will its new breakeven point be$($in sales$$ revenue$)?$

Begin by identifying the general formula to compute the breakeven sales in dollars.

$($

Fixed expenses

$+$

Operating income

$)-$:

Contribution margin ratio

$=$

Breakeven sales in dollars

Part $2$

Empire will now have to generate

of sales revenue to break even.revenue. If the company's fixed expenses increase by $$45,000$ due to the equipment, what will its new breakeven point be $($in sales revenue$)?$

If Empire Industries' fixed expenses increase by $$45,000$ due to the equipment, what will its new breakeven point be $($in sales revenue$)?$

Begin by identifying the general formula to compute the breakeven sales in dollars.

Fixed expenses $+$ Operating income