Sales quantity that would justify purchase of new equipment

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Reference no: EM131732142

Ski Boards, Inc., wants to enter the market quickly with a new finish on its ski boards. It has two choices:

A. make major modifications at a fixed cost of $33000

B. Purchase new equipment at a net fixed cost of $62000.

If the firm chooses to make modifications, variable materials and labor will be $24.20 per board. If it buys new equipment, variable costs are estimated to be $15.30 per board.

What is the minimum sales quantity that would justify the purchase of new equipment?

Reference no: EM131732142

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