Problem 2 Question Help * Two different manufacturing processes are being consid

Question

Problem 2 Question Help * Two different manufacturing processes are being considered for making a new product. The first process is less capita-intensive, with fixed costs of only $45,400 per year and variable costs of $660 per unit. The second process has fixed costs of $397,000 but variable costs of only $155 per unit a. What is the break-even quantity, beyond which the second process becomes more attractive than the first? The volume at which the second process becomes more attractive is units. (Enter your response rounded to the nearest whole number)

Explanation / Answer

Process 1 2 Fixed Costs 45400 397000 Variable Costs 660 155 Let breakeven quantity be x So for Process 2 to be better cost wise 45400+660x >= 397000 + 155x 505x > = 351600 x > = 696.238 X > = 697 Rounding off

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