Item 16 Item 16 Forrester Company Is Considering Buying New Equipment That Would

Item 16

Forrester Company is considering buying new equipment that would increase monthly fixed costs from $324,000 to $360,000 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 $1,200,000 and current break-even units are 12,000. If Forrester purchases this new equipment, the revised break-even point in dollars would be:

 

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