It is Jan 1, 2022 and Jasmine is evaluating her financial results from last year. She sold one product for $60 each and sold 1,500 units. Her variable costs totaled $60,000, while fixed costs worked out to $10 per unit.

Jasmine is considering buying new equipment which would lower her per-unit variable cost by one-quarter. However, her fixed costs would double. In this situation, she would increase prices by $5 per unit and she projects that her sales total will drop by 10%.

Give Jasmine some business advice, including break-even analysis and margin of safety. Explain the changes in Jasmines CVP graph when transitioning from the first to the second scenario