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( ii ) A company manufactures a product and finds that the fixed costs are 1 0 , 0 0 0 , the labour costs

(ii)
A company manufactures a product and finds that the fixed costs are 10,000, the labour costs are 6 per unit and other variable costs are 14 per unit. The selling price is fixed at 40.
Due to changes in the economic environment the company purchases a new machine for 2,100(this would increase the fixed costs by this amount). The new machine would mean that labour costs will be reduced by a third. Assume that other costs and the selling price remain unchanged.
Find the following level of sales.
(i) At the breakeven point.
(ii) To produce a profit of 2,200.
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