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A product can be made by two different approaches a capital intensive one and a labor intensive one. The capital intensive method has a startup
A product can be made by two different approaches a capital intensive one and a labor intensive one. The capital intensive method has a startup fixed cost of $5,000 and direct labor and material costs of $5/unit. The labor intensive method has a startup fixed cost of $5,000 and a direct labor and material cost of $50/unit. At what demand (sales) volume with management be indifferent to the two methods? a. 400 units b. 800 units c. 600 units d. 1000 units
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