Question
Use the accompanying graph to answer the following questions. Assume the company makes 89,000 parts per month of Product A and 15,500 parts per month
Use the accompanying graph to answer the following questions. Assume the company makes 89,000 parts per month of Product A and 15,500 parts per month of Product B.
(a) Which product has the higher variable cost, and what is this value in units of dollars per part? (b) Which product has the higher selling price, and what is this value in units of dollars per part? (c) Which product has the faster breakeven time, and what is this value in units of months? (d) At six years, which product makes more profit and what is this value in units of dollars? (e) If the fixed cost of product B is increased to $1,000,000 and the selling price is increased by $0.75 / part, what is the new breakeven point in units of months?
More Info $6 S $5 $4- an $2 O $1 $0 Product A Total Cost i Product B Total Cost Product A Revenue Product B Revenue 10 20 30 50 40 Time (t) months] 60 70 80Step by Step Solution
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