1. Mike McQuick has to buy a new piece of equipment for his manufacturing unit that makes dashcams. He has two options:1. US supplier has a version of the equipment with higher automation and hence lower labor requirements for using it. Fixed cost of using this US equipment is 30,000$ and the variable cost is 1$ per unit.2. A European supplier has a version of the equipment with little automation, that is cheaper but requires more labor time to use it.Fixed cost of using this European equipment is only 10,000$ and the variable cost is 8$ per unit.What is the break-even quantity? Enter your answer rounded to the nearest integer.

What is meant by the Break-even unit? It is the sales unit where no profit no gain situation is…

Answered: 1. Mike McQuick has to buy a new piece…

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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1. Mike McQuick has to buy a new piece of equipment for his manufacturing unit that makes dashcams. He has two options:

1. US supplier has a version of the equipment with higher automation and hence lower labor requirements for using it. Fixed cost of using this US equipment is 30,000$ and the variable cost is 1$ per unit.
2. A European supplier has a version of the equipment with little automation, that is cheaper but requires more labor time to use it.Fixed cost of using this European equipment is only 10,000$ and the variable cost is 8$ per unit.

What is the break-even quantity? Enter your answer rounded to the nearest integer.

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