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Forrester Company is considering buying new equipment that would increase monthly fixed costs from $217,500 to $288,000 and would decrease the current variable costs of
Forrester Company is considering buying new equipment that would increase monthly fixed costs from $217,500 to $288,000 and would decrease the current variable costs of $75 by $15 per unit. The selling price of $100 is not expected to change. Forrester's current break-even sales are $870,000 and current break-even units are 8,700. If Forrester purchases this new equipment, the revised contribution margin ratio would be:
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