Mullis Corp. manufactures DVDs that sell for $6.90. Fixed costs are $41,000 and variable costs are $4.90 per unit. Mullis can buy a newer production machine that will increase fixed costs by $12,300 per year, but will decrease variable costs by $0.60 per unit. What effect would the purchase of the new machine have on Mullis' break-even point in units?

Multiple Choice

• 6,150 unit increase.

• No effect.

• 4,731 unit increase.

• 4,731 unit decrease.

• 10,636 unit decrease.