A Manufacturer Contemplates a Change in Technology That Would Reduce

Multiple Choice

A manufacturer contemplates a change in technology that would reduce fixed costs from $800,000 to $600,000,and reduce depreciation expense from $125,000 to $100,000.However,the ratio of variable costs to sales will increase from 68% to 80%.What will happen to break-even level of revenues?

A) A reduction to the level of $875,000
B) A reduction to the level of $2,890,625
C) An increase to the level of $3,500,000
D) An increase to the level of $3,625,000