Shawn Pen & Pencil Sets Inc. has fixed costs of $600,400. Its product currently sells for $28 per unit and has variable costs of $12.20 per unit. Mr. Bic, the head of manufacturing, proposes to buy new equipment that will cost $540,000 and drive up fixed costs to $691,250. Although the price will remain at $28 per unit, the increased automation will reduce costs per unit to $8.25. a. Compute the following break-even points. (Do not round intermediate calculations.)

b. As a result of Bics suggestion, will the break-even point go up or down?

A. The break-even point will go up.

B. The break-even point will go down.