Mullis Corp

Multiple Choice

Mullis Corp.manufactures DVDs that sell for $5.00.Fixed costs are $28,000 and variable costs are $3.60 per unit.Mullis can buy a newer production machine that will increase fixed costs by $8,000 per year,but will decrease variable costs by $0.40 per unit.What effect would the purchase of the new machine have on Mullis' break-even point in units?

A) 4,444 unit increase.
B) 9,850 unit decrease.
C) 5,714 unit increase.
D) 4,444 unit decrease.
E) No effect.