Saturn Game Company manufactures computer games. Last year Saturn sold 25,000 games at $50 each. Total costs amounted to $1,050,000 of which $300,000 were considered fixed.

In an attempt to improve its product, the company is considering replacing a component part that has a cost of $5 with a new and better part costing $9 per unit in the coming year. A new machine would also be needed to increase plant capacity. The machine would cost $36,000 with a useful life of six years and no salvage value. The company uses straight-line depreciation on all plant assets. (Ignore income taxes.)

1.What was Saturn Game Company