Small Sally's Manufacturing Currently Produces Its Lead Product on a Machine

question 78

Short Answer

Small Sally's Manufacturing currently produces its lead product on a machine that has a variable cost of $0.47 per unit, and fixed costs of $87,000. Small Sally is considering purchasing a new machine that will drop the variable cost to $.14 per unit, but has a fixed cost of $114,000. What is the cross-over point between the two machines?

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Definitions:

Highly Charged

Describes an object or situation that holds a significant amount of electrical charge or emotional intensity.

Information Overload

A condition where an individual is exposed to too much information, making it difficult to process, understand, and make decisions.

Overused

Refers to something that is used more often than is necessary or advisable, which can lead to inefficiency or diminished effectiveness.

In-Person Communication

Direct communication between individuals present in the same location, involving verbal and non-verbal interaction.