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In a factory, skilled workers are being paid $20 an hour, and it takes 3 hours to make each unit. Other variable costs are $6 per unit and fixed costs are $3 per unit. If a new machine is bought, other variable costs will fall by $1 and each unit will need just one hour of labour. The machine will add $10,000 p.a. to fixed costs. To what must sales and production figures increase for the machine to be worthwhile? A. 10,000 units. B. 250 units. C. 244 units. D. 222 units. |