Tyrene Products manufactures recreational equipment. One of the company's products, a skateboard, sells for $37. The skateboards are manufactured at an antiquated plant that relies heavily on direct labor workers. Thus, variable costs are high, totaling $25.90 per skateboard of which 70% is direct labor cost.

Over the past year, the company sold 43,000 skateboards, with the following operating results :

Sales (43,000 skateboards) : $1,591,000

Variable Expenses : $1,113,700

Contribution Margin : $477,300

Fixed Expenses : $277,500

Net Operating Income : $199,800

The company is considering the construction of a new automated plant. The new plant would slash variable costs by 20%, but it would increase fixed costs by 60%. If the new plant is built, what would be company's new break-even point in skateboards?

A) 25,000 B) 27,273 C) 30,000 D) 43,000

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