Suppose Philip Neilson (from problem 8) decides to expand his business His new xed expenses will be $20,000, but the average cost for a reworks assortment will fall to just $5 due to Philips higher purchase volumes a What is the new break even point b At what volume level is Philip indifferent to t...

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Suppose Philip Neilson (from problem 8) decides to expand his business. His new xed expenses will be

Question:

Suppose Philip Neilson (from problem 8) decides to expand his business. His new ﬁxed expenses will be $20,000, but the average cost for a ﬁreworks assortment will fall to just $5 due to Philip’s higher purchase volumes.
a. What is the new break-even point?
b. At what volume level is Philip indifferent to the two capacity alternatives outlined in problems 8 and 9?