Kent Co. manufactures a product that sells for $50.00. Fixed costs are $260,000 and variable costs are $24.00 per unit. Kent can buy a new production machine that will increase fixed costs by $11,400 per year, but will decrease variable costs by $3.50 per unit. What effect would the purchase of the new machine have on Kent's break-even point in units?
1) 10,000 units.
2) 10,438 units.
3) 9,869 units.
4) 9,200 units.
5) 8,814 units.