Shawn Pen Pencil Sets Inc has fixed costs of $585,200 Its product currently sells for $27 per unit and has variable costs of $11 80 per unit Mr Bic, the head of manufacturing, proposes to buy new equipment that will cost $530,000 and drive up fixed costs to $684,000 Although the price will remain at $27 per unit, the increased automation will reduce costs per unit to $8 00 a Compute the following break even points (Do not round intermediate calculations ) units Current break even point Proposed new break even point units 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

Question

Shawn Pen   Pencil Sets Inc  has fixed costs of $585,200  Its product currently sells for $27 per unit and has variable costs of $11 80 per unit  Mr  Bic, the head of manufacturing, proposes to buy new equipment that will cost $530,000 and drive up fixed costs to $684,000  Although the price will remain at $27 per unit, the increased automation will reduce costs per unit to $8 00  a  Compute the following break even points  (Do not round intermediate calculations ) units Current break even point Proposed new break even point units 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

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Shawn Pen & Pencil Sets Inc. has fixed costs of $585,200. Its product currently sells for $27 per unit and has variable costs of $11.80

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