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Shawn Pen & Pencil Sets Inc. has fixed costs of $309,400. Its product currently sells for $13 per unit and has variable costs of $6.20
Shawn Pen & Pencil Sets Inc. has fixed costs of $309,400. Its product currently sells for $13 per unit and has variable costs of $6.20 per unit. Mr. Bic, the head of manufacturing, proposes to buy new equipment that will cost S390,000 and drive up fixed costs to $433,500. Although the price will remain at $13 per unit, the increased automation will reduce costs per unit to $4.50. a. Compute the following break-even points. (Do not round intermediate calculations.) Current break-even point Proposed new break-even point units units b. As a result of Bic's suggestion, will the break-even point go up or down? O The break-even point will go down. The break-even point will go up
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