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A company is considering a new machine to produce a new product. Machine type A can produce 20 products per hour. The fixed costs associated
A company is considering a new machine to produce a new product. Machine type A can produce 20 products per hour. The fixed costs associated with Machine A are $20 000 and the variable costs are $2.00 per unit. Machine B is larger and can produce 40 products per hour. The fixed costs associated with machine B are $30 000 and the variable costs are $1.25 per unit. The products sell for $14 each. a. What is the break-even point for each machine? b. If the owner expects to sell 9000 products, which machine is more profitable?
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