Question

Lincoln Company sells logs for an average of $18 per log. The company’s president, Abraham, estimates the variable manufacturing and selling costs total $6 per log. Logging operations require substantial investments in equipment, so fixed costs are quite high and total $108,000 per month. Abraham is considering making an investment in a new piece of logging equipment that will increase monthly fixed costs by $12,000.

Required
Assist Abraham by calculating the number of additional logs that must be sold to break even after investing in the new equipment.



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  • CreatedMarch 11, 2015
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