Question
Assume that you and your brother plan to open a business that will make and sell a newly designed type of sandal. Two robotic machines
Assume that you and your brother plan to open a business that will make and sell a newly designed type of sandal. Two robotic machines are available to make the sandals, Machine A and Machine B. The price per pair will be $14.50 regardless of which machine is used. The fixed and variable costs associated with the two machines are shown below. What is the difference between the break-even points for Machines A and B? Do not round your intermediate calculations. (Hint: Find BE B - BE A)
Machine A | Machine B | |
Price per pair (P) | $14.50 | $14.50 |
Fixed costs (F) | $25,000 | $100,000 |
Variable cost/unit (V) | $7.00 | $4.00 |
a. | 6,190 | |
b. | 7,305 | |
c. | 6,933 | |
d. | 4,890 | |
e. | 5,324 |
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