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The maker of UCarts is purchasing a new stamping machine. Two options are being considered, Rooney and Blair. The sales forecast for UCarts is 8,000 units for next year. If purchased, the Rooney will increase plant fixed costs by $20,000 and reduce variable costs by $5.60 per unit. The Blair would increase fixed costs by $5,000 and reduce variable costs by $4.00 per unit. If variable costs are now $20 per unit, which machine should be purchased.

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Cost calculations for UCarts purchasing new stamping machines.

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Rooney Blair

Current variable cost 20 20

Reduction of ...

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