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Kent Company manufactures a product that sells for $120.00. Fixed costs are $179,400 and variable costs are $36.00 per unit. Kent can buy a new production machine that will increase fixed costs by $12,480 per year, but will decrease variable costs by $9.60 per unit. Compute the revised break even point in dollars with the purchase of the new machine.

Kent Company manufactures a product that sells for $120.00. Fixed costs are $179,400 and variable costs are $36.00 per unit. Kent can buy a new production machine that will increase fixed costs by $12,480 per year, but will decrease variable costs by $9.60 per unit. Compute the revised break even point in dollars with the purchase of the new machine.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Kent Company manufactures a product that sells for $120.00. Fixed costs are $179,400 and variable costs are $36.00 per unit. Kent can buy a new production machine that will increase fixed costs by $12,480 per year, but will decrease variable costs by $9.60 per unit. Compute the revised break- even point in dollars with the purchase of the new machine. Multiple Choice О $274,114. О $153,771. О $246,000.
Transcribed Image Text:Kent Company manufactures a product that sells for $120.00. Fixed costs are $179,400 and variable costs are $36.00 per unit. Kent can buy a new production machine that will increase fixed costs by $12,480 per year, but will decrease variable costs by $9.60 per unit. Compute the revised break- even point in dollars with the purchase of the new machine. Multiple Choice О $274,114. О $153,771. О $246,000.
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