Managing Engineering and Technology 6th Edition by Lucy Morse,Daniel Babcock

Exercise 4

A machine tool salesperson offers the plant of Question 11-2 equipment that would increase their fixed cost by $180,000, but reduce their variable cost from $40.00 to $25.00. Should the plant accept this suggestion if they can sell their entire plant capacity of 10,000 units per year at $100 each? Illustrate by modifying the break-even chart of Question 11 2.