Sean Penn and pencil sets inc has fixed costs of $553,000. It's product currently sells for $25 per unit and has variable costs of $11 per unit. Mr. Beck the head of manufacturing, proposes to buy new equipment that will cost $510,000 drive up fixed costs to $665,000 although the price will remain at $25 per unit the increase automation will reduce

cost per unit to $7.50.

current break even point ____units Proposed new break even point____units

As a result of Becks suggestion will the break even point go up or down?

Shawn Pen \& Pencil Sets Inc. has fixed costs of $553,000. Its product currently sells for $25 per unit and has variable costs of $11.00 per unit. Mr. Bic, the head of manufacturing, proposes to buy new equipment that will cost $510,000 and drive up fixed costs to $665,000. Although the price will remain at $25 per unit, the increased automation will reduce costs per unit to $7.50. a. Compute the following break-even points. (Do not round intermediate calculations.) b. As a result of Bic's suggestion, will the break-even point go up or down? The break-even point will go up. The break-even point will go down