Question: Bevil Industries is planning on purchasing a new piece of
Bevil Industries is planning on purchasing a new piece of equipment that will increase the quality of its production. It hopes the increased quality will generate more sales. The company’s contribution margin ratio is 40%, and its current break-even point is $500,000 in sales revenue. If Bevil Industries’ fixed expenses increase by $40,000 due to the equipment, what will its new break-even point be (in sales revenue)?
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