Mullis Corp. manufactures DVDs that sell for $5.00. Fixed costs are $28,000 and variable costs are $3.60 per unit. Mullis can buy a newer production machine that will increase fixed costs by $8,000 per year, but will decrease variable costs by $0.40 per unit. What effect would the purchase of the new machine have on Mullis' break-even point in units?
A. 4,444 unit increase.
B. No effect.
C. 4,444 unit decrease.
D. 5,714 unit increase.
E. 9,850 unit decrease.
Answer: B
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