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Softwood Industries plans to sell a new product for $70 per unit. Softwood has enough existing capacity to produce 12,000 units of this new product
Softwood Industries plans to sell a new product for $70 per unit. Softwood has enough existing capacity to produce 12,000 units of this new product per year at a variable cost of $36 per unit and total fixed cost of $470,000 per year if necessary. Softwood can expand its capacity by renting additional space. The annual rent expense would be $60,000 and the variable cost of units produced in the rented space would be $45 per unit. How many units does Softwood need to produce and sell to breakeven on the new product line?
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