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olga55 [171]
3 years ago
15

Forrester Company is considering buying new equipment that would increase monthly fixed costs from $276,000 to $544,500 and woul

d decrease the current variable costs of $60 by $15 per unit. The selling price of $100 is not expected to change. Forrester's current break-even sales are $690,000 and current break-even units are 6,900. If Forrester purchases this new equipment, the revised break-even point in dollars would be:
a.$501,818.
b.$690,000.
c.$379,500.
d.$878,182.
e.$990,000.
Business
2 answers:
REY [17]3 years ago
6 0

Answer:

The correct answer is E.

Explanation:

Giving the following information:

Forrester Company is considering buying new equipment that would increase monthly fixed costs from $276,000 to $544,500 and would decrease the current variable costs of $60 by $15 per unit. The selling price of $100 is not expected to change.

Break-even point (dollars)= fixed costs/ contribution margin ratio

Break-even point (dollars)= 544,500/ [(100-45)/100]

Break-even point (dollars)= $990,000

OlgaM077 [116]3 years ago
5 0

Answer:

544,500+45x=100x

55x= 544,500

x= 9,900 = new break even point of units

9,900*100= 9,900,00

Ans= e.$990,000.

Explanation:

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Value of property purchased in State B A      $90,000

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Pre-Credit use tax C (A*B)                                 $4,500

Credit Sales tax paid to State B D                   <u>($5,400)</u>

Use tax owed to State V E (C+D)                      <u>$0          </u>

b. Particulars                                                          Amount

Value of property purchased in State D A        $200,000

Tax rate in State V B                                           <u>        </u><u>5%      </u>

Pre-credit use tax C (A*B)                                   $10,000

Credit Sales tax paid to State D D                     <u>($7,000)   </u>

Use tax owed to State V E (C+D)                       <u>$3,000    </u>

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