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Forrester Company is considering buying new equipment that would increase monthly fixed costs from $379,500 to $507,000 and would decrease the current variable costs of
Forrester Company is considering buying new equipment that would increase monthly fixed costs from $379,500 to $507,000 and would decrease the current variable costs of $75 by $10 per unit. The selling price of $130 is not expected to change. Forrester's current break-even sales are $897,000 and current break-even units are 6,900. If Forrester purchases this new equipment, the revised break-even point in dollars would be:
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a. $759,000.
b. $897,000.
c. $345,000.
d. $1,035,000.
e. $1,014,000.
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