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April 19, 2014

Homework Help: Accounting

Posted by Tara on Thursday, February 4, 2010 at 2:38pm.

A manufacturing company has to decide between their current process which has a variable cost of $10/unit and investing in new equipment which will reduce the variable cost to $5/unit. The new equipment will cost $100,000. Use a break-even analysis to determine the number of units that the company will need to build to make the investment in the new equipment worthwhile. What is the break-even volume?

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