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Allen Company sells homework machines for $100 each. Variable costs per unit are $75 and total fixed costs are $62,000. Allen is considering the purchase of new equipment that would increase fixed costs to $84,000, but decrease the variable costs per unit to $60. At that level Allen Company expects to sell 3,000 units next year. What is Allen's break-even point in units if it purchases the new equipment?

a) 2,480 units

b) 36,000 units

c) 2,100 units

d) 3,650 units

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M957285

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