hi.Can someone solve this please ? thankyou Question 16 Tries remaining: 3 Marke

Question

hi.Can someone solve this please ?
thankyou

Question 16 Tries remaining: 3 Marked out or 1.00 | P Flag question 5 A car component can be produced by either of two manufacturing methods, method A or method B For method A the fixed costs are £90000 per year and the variable costs are £15 per component For method B the fixed costs are £99000 per year and the variable costs are £10 per component Calculate the break-even quantity per year, for which the cost of manufacture is the same whichever method is used Give your answer as an exact value Break-even quantity Check

Explanation / Answer

Let the break-even quantity be q per year. Then, the total annual cost

= 90000 + 15q for Method A ………………………………………………(1)

= 99000 + 10q for Method B ………………………………………………(2)

Equating (1) and (2): 90000 + 15q = 99000 + 10q or

5q = 9000 or

q = 1800.

Thus, the break-even quantity = 1800 per year ANSWER

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