X Company spent $7,200 on an engineering study that revealed that Product A coul

Question

X Company spent $7,200 on an engineering study that revealed that Product A could be manufactured more efficiently. The new process would result in variable cost savings of $0.67 per unit and additional fixed costs of $3,700. Current variable costs per unit are 3.77, and current fixed costs are $10,050. Last year, X Company sold 3,600 units of Product A at a price of $12.88. At what unit sales level would X Company be indifferent between adopting the new process and not adopting it? Submit Answer Tries 0/3

Explanation / Answer

Level of sales at which company would be indifferent = 3700/0.67= 5522

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