Allied Inc. is considering the purchase of a new piece of equipment. Relevant data are shown below. $\begin{array}{|l|rr|}
\hline \text { Annual Fixed Cost } &{\$ 700,000} \
\hline \text { Variable Cost per Unit } & \$ & 75 \
\hline \text { Revenue per Unit } & \$ & 200 \
\hline
\end{array}$
a.Using this information, determine the breakeven volume.
b.If the anticipated demand for the product is 5,000 units, should Allied purchase the new equipment?

Question

Allied Inc. is considering the purchase of a new piece of equipment. Relevant data are shown below. $\begin{array}{|l|rr|}
\hline \text { Annual Fixed Cost } &{\$ 700,000} \
\hline \text { Variable Cost per Unit } & \$ & 75 \
\hline \text { Revenue per Unit } & \$ & 200 \
\hline
\end{array}$ 
a.Using this information, determine the breakeven volume.
b.If the anticipated demand for the product is 5,000 units, should Allied purchase the new equipment?

Quizplus · Accepted Answer

The Answer of Allied Inc. is considering the purchase of a new piece of equipment. Relevant data are shown below. $\begin{array}{|l|rr|}
\hline \text { Annual Fixed Cost } &{\$ 700,000} \
\hline \text { Variable Cost per Unit } & \$ & 75 \
\hline \text { Revenue per Unit } & \$ & 200 \
\hline
\end{array}$ 
a.Using this information, determine the breakeven volume.
b.If the anticipated demand for the product is 5,000 units, should Allied purchase the new equipment?

Allied Inc AUsing This Information, Determine the Breakeven Volume