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RST Company produces a product that has a variable cost of $6 per unit. The company's fixed costs are $30,000. The product sells for $10 per unit. The company is considering purchasing a new manufacturing machine which would improve efficiency. The new machine would decrease the variable cost to $4, but increase fixed costs by $15,000. The revised break-even point in dollars is $

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hyderali230

Answer:

The revised break-even is $75,000

Explanation:

Break-even point is the level of sale at which business has no profit no loss situation.It means business has covered all variable and fixed cost associated with the object.

According to given data

Revised Variable cost = $4

Revised Fixed cost = $30,000 + $15,000 = $45,000

Revised Contribution margin = $10 -$4 = $6

Contribution margin ratio = 6/10 = 0.6 = 60%

Break-even point in$ = Fixed cost / Contribution margin ratio = $45,000 / 0.6 = $75000

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