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ABC Company sells its product for $16.00 per item. The Fixed Costs of the company are $240,000 per year, and the Variable Cost per Item is $8.00. The management has been offered an opportunity to move into a smaller facility, which would lower the Fixed Costs to $200,000. However, the Variable Cost per item would actually increase to $9.00 at this new facility. Management had come to you for advice. Please calculate the Break Even units required for both of the above scenarios. Give these 2 numbers to Management. Then, give your recommendations to the management team as to whether they should move to the new facility or not.
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ABC Company sells its product for $16.00 per item. The Fixed Costs of the company are $240,000 per y...
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