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Perry Corporation produces and sells a single product. Data for that product are: Sales price per unit $280 Variable cost per unit $150 Fixed expenses

Perry Corporation produces and sells a single product. Data for that product are:

Sales price per unit

$280

Variable cost per unit

$150

Fixed expenses for the month

$690,000

Currently selling

12,000 units

Upper management is considering using a biodegradable packaging which costs

$7

more per unit but it produces less waste in the long run. Management plans to increase advertising by

$14,000

in the first month to advertise this new feature to their packaging. They believe that environmentally friendly people will switch to their product resulting in an increase in sales of

3,500

units per month.

What is the effect to the company's breakeven point if these changes are implemented?

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