Mary Is Considering Purchasing a Machine from Two Suppliers

question 46

Essay

Mary is considering purchasing a machine from two suppliers. Supplier A's machine has an annual fixed cost of $10,000 and a unit variable cost of $2.10. Supplier B's machine has an annual fixed cost of $16,000 and a unit variable cost of $3.00. How large should Mary's annual demand be in order to make Supplier B's machine the better choice?

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Definitions:

Workers' Compensation Laws

Legislation designed to provide financial and medical benefits to employees who are injured or become ill as a direct result of their job.

State Law

Laws and regulations that are established and enforced by the individual states within a country.

Vary

To change or alter in form, appearance, or nature, often with the implication of slight differences.

Federal Minimum Wage Requirements

The lowest legal hourly wage that employers can pay their workers as mandated by federal law.