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The ABC Ltd. is considering the replacement of its old machine. The particulars relating to two alternative proposals are given below: Cost per unit:

The ABC Ltd. is considering the replacement of its old machine. The particulars relating to two alternative proposals are given below: Cost per unit: Material Labor Overhead Total Fixed cost Sales price per unit is Tk. 80 Machine A Tk. 30 18 12 40,000 Machine B Tk. 30 15 10 80,000 Calculate the break-even production in each case. Which machine should be bought if 5000 units are to be produced? ) Which machine is profitable for production of 10,000 units in a year? iv) Calculate the volume of production at which the machine would be equality profitable.

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To calculate the breakeven production for each machine we need to determine the number of units required to cover the total fixed costs For Machine A ... blur-text-image

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