Question
Asked Jan 31, 2020
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North Pole Toys needs to decide on their newest product line for Christmas. They narrowed their options to two possibilities: Product A would incur a fixed cost of $3,000 and a variable cost of $6 per unit and sells for $7.50; Product B would incur a fixed cost of $1,200 and a variable cost of $9 per unit and sells for $10.

__________4a. What is the breakeven point for each of the two products?

__________4b. What is the point of indifference between the two products?

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Expert Answer

Step 1

For the product A

Given:

Fixed Cost= $3000

Variable cost= $6

Selling Price= $7.50

Operations Management homework question answer, step 1, image 1

Step 2

For the product B

Given:

Fixed Cost= $1200

Variable cost= $9

Selling Price= $10

Operations Management homework question answer, step 2, image 1

...

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