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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 would increase from 68% to 80%. What would be the change in the break - even level of revenues?

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 would increase from 68% to 80%. What would be the change in the break - even level of revenues?

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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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 would increase from 68% to 80%. What would be the change in the break - even level of revenues?
Transcribed Image Text: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 would increase from 68% to 80%. What would be the change in the break - even level of revenues?
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