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Kitchen Innovations, Inc., is considering introducing a new line of toaster ovens. Before proceeding with a more thorough analysis, the company wants to know what
Kitchen Innovations, Inc., is considering introducing a new line of toaster ovens. Before proceeding with a more thorough analysis, the company wants to know what the financial break-even quantity is for the project. The data they have gathered are as follows:
- The company believes it will be able to produce and sell 10,000 units per year at a retail price of $100 each.
- Variable costs for the project are $25 per unit
- Fixed costs have been estimated as $200,000 per year
- The production equipment needed for the project will cost $500,000, which will be depreciated to 0 over its 5-year estimated life on a straight-line basis.
- The companys tax rate is 21%
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