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Westside produces pillows with monthly unit sales and costs given as: Unit Sales: 4000 units Price: $10.00 per unit Variable costs: $5.50 per unit Fixed

Westside produces pillows with monthly unit sales and costs given as:

  1. Unit Sales: 4000 units
  2. Price: $10.00 per unit
  3. Variable costs: $5.50 per unit
  4. Fixed costs: $15,000
  5. Given the production capacity of 4,000, the company has to install another workstation at a monthly cost of $800 (assume no change of variable costs). The new station raises plant capacity by 1,000 units. By what % would sales have to increase to justify a 5% price cut?

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