It is Jan 1, 2022, and John is evaluating his financial results from last year. He sold one product for $60 each and sold 1,500 units. His variable costs totaled $60,000, while fixed costs worked out to $10 per unit. John is considering buying new equipment which would lower his per unit variable cost by one-quarter. However, his fixed costs would double. In this situation, he would increase prices by $5 per unit and he projects that his sales total will drop by 10%.

Instruction: You are required to: In a formal business report, give John some business advice, including break-even analysis and margin of safety. Explain the changes in Johns CVP graph when transitioning from the first to the second scenario.