Process a Has Fixed Costs of $1000 and Variable Costs

question 95

Multiple Choice

Process A has fixed costs of $1000 and variable costs of $5 per unit.Process B has fixed costs of $500 and variable costs of $15 per unit.What is the crossover point between process A and process B?

• A)50 units
• B)200 units
• C)$2,500
• D)$5,000
• E)$9,500

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Definitions:

Sale

A transaction between two parties where the buyer receives goods, service, or asset in exchange for money.

Accounts Receivable

Funds that customers owe to a company for products or services that have been provided but not yet compensated for.

Accounts Payable

A liability to a creditor, carried on an open account, usually for purchases of goods and services.

Prepaid Expenses

Costs paid in advance for goods or services to be used or received in the future, classified as current assets on a balance sheet.