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Process X is estimated to have a fixed cost of $40,000 per year and a variable cost of $60 per unit in year 1, decreasing
Process X is estimated to have a fixed cost of $40,000 per year and a variable cost of $60 per unit in year 1, decreasing by $5 per unit per year. Process Y will have a fixed cost of $70,000 per year and a variable cost of $10 per unit, increasing by $1 per unit per year. At an interest rate of 12% per year, how many units must be produced in year 3 for the two processes to break even?
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