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Draw two break-even graphs-one for a conservative firm using labor-intensive production and another for a capitaHintensive firm. Assuming these companies compete within the same industry
Draw two break-even graphs-one for a conservative firm using labor-intensive production and another for a capitaHintensive firm. Assuming these companies compete within the same industry and have identical sales, explain the impact of changes in sales volume on both firms' profits. Based on the following assumtions, draw two break-even graphs. Selling price Variable cost per unit Fixed costs Labor Intensive $12.00 $8.00 $200,000 Capital Intensive $12.00 $5.00 $300,000 Solution Problem 5-4 Instructions Select the appropriate range required to draw the graph. Complete the tables below for both the Labor-Intensive and capitaHintensive firms. Labor-Intensive Company Units Total Revenue Variable costs Contribution margin Fixed Costs Total Costs 100,000 Labor-Intensive Company Total Revenue Fixed costs Total costs
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