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Holdings Corp has fixed costs of $400,200. Its product currently sells for $17 per unit and has variable costs of $7.80 per unit. Mr. Careful,
Holdings Corp has fixed costs of $400,200. Its product currently sells for $17 per unit and has variable costs of $7.80 per unit. Mr. Careful, the head of manufacturing, proposes to buy new equipment that will cost $430,000 and drive up fixed costs to $540,500. Although the price will remain at $17 per unit, the increased automation will reduce costs per unit to $5.50. a. Compute the following break-even points. (Do not round intermediate calculations. Round your answers to the nearest whole number.) units Current break-even point Proposed new break- even point units b. As a result of Bic's suggestion, will the break-even point go up or down? The break-even point will go up. The break-even point will go down
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