Multiple Choice
Forrester Company is considering buying new equipment that would increase monthly fixed costs from $120,000 to $150,000 and would decrease the current variable costs of $70 by $10 per unit.The selling price of $100 is not expected to change.Forrester's current break-even sales are $400,000 and current break-even units are 4,000.If Forrester purchases this new equipment,the revised break-even point in dollars would be:
A) $300,000.
B) $400,000.
C) $325,000.
D) $500,000.
E) $375,000.
Correct Answer:
Verified
Correct Answer:
Verified
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