A new product will sell in the market for $12. It costs $7 (unit variable cost) to manufacture on a new lathe machine. If the break-even quantity is 10,000 units, what is the annual fixed cost involved in acquiring the machine and in paying other fixed costs?
◦ Greater than $55,000 but less than or equal to $70,000
◦ Greater than $40,000 but less than or equal to $55,000
◦ Greater than $70,000
◦ Less than $40,000