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Kasson Company produces and sells a product that sells for $50 per unit. The variable costs are $19 per unit. Last year, Kasson Company sold
Kasson Company produces and sells a product that sells for $50 per unit. The variable costs are $19 per unit. Last year, Kasson Company sold 23,000 units of this product to customers. The break-even point last year was 12,500 units. In an attempt to improve the company's profitability, the president of Kasson Company decided to make the following changes for the coming year: 1. reduce the selling price of the product by 12% 2. use higher quality materials in the manufacture of the product which increased the variable costs by $4 per unit 3. increase advertising by $64,000 Calculate the number of units of this product Kasson Company needs to sell in the coming year in order to break-even, assuming these changes are made.
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