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Trader Mo s is a furniture company. The company has decided to alter its strategy by selling its automated production equipment and producing furniture using
Trader Mos is a furniture company. The company has decided to alter its strategy by selling its automated production equipment and producing furniture using skilled labor instead. However, in the shortterm, the company is unable to cut fixed costs due to contractual obligations related to production equipment. In the shortterm, how will this change in strategy affect the breakeven point?
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The breakeven point will increase.
The breakeven point will decrease.
The breakeven point will remain the same.
We cannot answer this question without knowing the average selling price of the furniture.
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