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Spencer Inc. manufactures a product that costs $36 per unit plus $32,000 in fixed costs each month. Spencer currently sells 1,000 of these units per
Spencer Inc. manufactures a product that costs $36 per unit plus $32,000 in fixed costs each month. Spencer currently sells 1,000 of these units per month for $80 each. If Spencer leased a machine for $8,000 a month, it could add features to the product that would allow it to sell for $120 each. It would cost an additional $12 per unit to add these features. How much would Spencer's profit be affected if it leased the machine and added features to its product?
Increase $32,000
Decrease $20,000
Increase $20,000
Decrease $32,000
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