A Manufacturer Contemplates a Change in Technology That Would Reduce

question 42

Multiple Choice

A 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?

• A) Increase of $609,375
• B) Increase of $574,750
• C) Decrease of $211,250
• D) Decrease of $341,675

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