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Parker Pottery produces a line of vases an a line of ceramic figures. Each line uses the same equipment and labor; hence, there are no traceable fixed costs. Common fixed cost equals $30,000. Parker’s accountant has begun to assess the profitability of the two lines and has gathered the following data for last year:
|Number of units||1,000||500|
1. Compute the number of vases and the number of figurines t hat must be sold for the company to break even.
2. Parker Pottery is considering upgrading its factory to improve the quality of its product. The upgrade will add $5,260 per year to total fixed cost. If the upgrade is successful, the projected sales of vases will be 1,500, and figurine sales will increase to 1,000 units. What is the new break-even point in units for each of the products?