How to differentiate between break even points for two machines
How to differentiate between breakeven points for two machines
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Assume that you and your brother plan to open a business that will make and sell a newly designed type of sandal. Two robotic machines are available to make the sandals, Machine A and Machine B. The price per pair will be $19.50 regardless of which machine is used. The fixed and variable costs associated with the two machines are shown below. What is the difference between the breakeven points for Machines A and B? (Hint: Find BEB – BEA)
Machine A Machine B
Price per pair (P) $19.50 $19.50
Fixed costs (F) $25,000 $100,000
Variable cost/unit (V) $7.00 $4.00
a. 3,784
b. 4,318
c. 3,739
d. 4,674
e. 4,452