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Mullis Corp. manufactures DVDs that sell for $5.70. Fixed costs are $29,000 and variable costs are $3.70 per unit. Mullis can buy a newer production
Mullis Corp. manufactures DVDs that sell for $5.70. Fixed costs are $29,000 and variable costs are $3.70 per unit. Mullis can buy a newer production machine that will increase fixed costs by $4,350 per year, but will decrease variable costs by $0.30 per unit. What effect would the purchase of the new machine have on Mullis' break-even point in units?
8,772 unit decrease.
2,175 unit increase.
No effect.
1,891 unit decrease.
1,891 unit increase.
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