A rotational molding operation has fixed costs of $10,000 per year and variable costs of $50 per unit. If the process is automated via conveyor, its fixed cost will be $22,800 per year but its variable cost will be only $10 per unit. Determine the number of units each year necessary for the two operations to break even
A rotational molding operation has fixed costs of $10,000 per year and variable costs of $50 per unit. If the process is automated via conveyor, its fixed cost will be $22,800 per year but its variable cost will be only $10 per unit. Determine the number of units each year necessary for the two operations to break even
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter8: Cost Analysis
Section: Chapter Questions
Problem 1.1CE
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Question
A rotational molding operation has fixed costs of
$10,000 per year and variable costs of $50 per unit.
If the process is automated via conveyor, its fixed
cost will be $22,800 per year but its variable cost
will be only $10 per unit. Determine the number of
units each year necessary for the two operations to
break even
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