Kohler Corporation 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?
A) It will remain unchanged.
B) It will decrease.
C) It will increase.
D) It cannot be determined from the information provided.

Question

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The Answer of Kohler Corporation 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?
A) It will remain unchanged.
B) It will decrease.
C) It will increase.
D) It cannot be determined from the information provided.

Kohler Corporation Sells Its Product for $40