Stephanie, inc. sells its product for $40. the variable costs are $18 per unit. fixed costs are $16,000. the company is considering the purchase of an automated machine that will result in a $2 reduction in unit variable costs and an increase of $5,000 in fixed costs. which of the following is true about the break-even point in units it will remain unchanged it will decrease. it will increase. it cannot be determined from the information provided.

It will increase

Explanation:

Before the purchase of the automated machine, break even point is computed as follows:

Sale price: $40

Less variable cost: $18

Therefore, contribution per unit = $40 - $18 = $22.

With fixed cost at $16,000, breakeven point in units =

= 16,000/22

Break even cost = 727.27 units.

With the purchase of the automated machine, break even point is computed as follows:

Sale price: $40

Less variable cost: ($18 - $2) = $16

Therefore, contribution per unit = $40 - $16 = $24.

Fixed cost = $16,000 + $5,000 = $21,000.

Breakeven point in units = 21,000/24

Break even cost = 875 units.

Therefore, breakeven point will increase as a result of the purchase of the automated machine.

answer(b) partnership';