Spies Electronics sells homework machines for $80 each. Variable costs per unit are $45 and total fixed costs are $43,750.
Splurge is considering the purchase of new equipment that would increase fixed costs to $48,700, but decrease the variable costs per unit by $5.
At that level, Splurge Electronics expects it can sell 1,500 units next year.
What is the company's break-even point in units if it purchases the new equipment, assuming the selling price remains constant?
(Round your answer to the nearest whole number and show deatiled explaination.)
A. 1,250 units
B. 1,218 units
C. 650 units
D. 2,312 units