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Three Processes Have the Following Costs: Process a Has a Fixed

Question 27

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Three processes have the following costs: Process A has a fixed cost of $2,000 and variable cost of $3.00/unit. Process B's fixed cost is $4,000 and variable cost is $2.60/unit. Process C's fixed cost is $8,000 and variable cost is $2.40/unit.
-A firm can procure gummy bags for $1.25 and sell them for $1.99. Instead of purchasing from outside, the firm could buy a gummy bag machine for $2,500 and make gummy bags for $1.00 per unit. At what point is buying the units the same as making them?


A) 5,000 units
B) 10,000 units
C) 15,000 units
D) 20,000 units
E) 25,000 units

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