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Splurge Electronics sells homework machines for $80 each. Variable costs per unit are $45 and total fixed costs are $43,750. Splurge is considering the purchase
Splurge Electronics sells homework machines for $80 each. Variable costs per unit are $45 and total fixed costs are $43,750. Splurge is considering the purchase of new equipment that would increase fixed costs to $55,000, but decrease the variable costs per unit by $5. At that level, Splurge Electronics expects it can sell 1,500 units next year. What is the company's break-even point in units if it purchases the new equipment, assuming the selling price remains constant?
A. | 1,250 units |
B. | 734 units |
C. | 2,469 units |
D. | 1,375 units |
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