Essay
A product is currently made in a process-focused shop, where fixed costs are $9,000 per year and variable costs are $50 per unit. The firm is considering a fundamental shift in process, to repetitive manufacturing. The new process would have fixed costs of $90,000, and variable costs of $10. What is the crossover point for these processes? For what range of outputs is each process appropriate?
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The crossover is at 2025 units...View Answer
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Correct Answer:
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