Big John's Manufacturing Currently Produces Its Lead Product on a Machine

question 45

Essay

Big John's Manufacturing currently produces its lead product on a machine that has a variable cost of $0.32 per unit,and fixed costs of $75,000.Big John is considering purchasing a new machine that would drop the variable cost to $.28 per unit,but has fixed costs of $150,000.What is the cross-over point between the two machines?

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Definitions:

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