9. A company can manufacture a product with off-the-shelf hand tools. Fixed costswill be $1,000 for tools and $1.50 manufacturing costs per unit. As an alternative,an automated system will cost $15,000 with S0.50 manufacturing cost per unit.With an anticipated volume of 5,000 units, the break-even point in years isa) 2.0 yr.b) 2.8 yr.c) 3.6 yr.d) 10.0 yr.

For answering the question, we are required to first find the volume which is required for break…

A company can manufacture a product with off-the-shelf hand tools. Fixed costs will be $1,000 for tools and $1.50 manufacturing costs per unit. As an altenative, an automated system will cost $15,000 with $0.50 manufacturing cost per unit. With an anticipated volume of 5,000 units, the break-even point in years is a) 2.0 yr. b) 2.8 yr. c) 3.6 yr. d) 10.0 yr.

A company can manufacture a product with off-the-shelf hand tools. Fixed costs will be $1,000 for tools and $1.50 manufacturing costs per unit. As an altenative, an automated system will cost $15,000 with $0.50 manufacturing cost per unit. With an anticipated volume of 5,000 units, the break-even point in years is a) 2.0 yr. b) 2.8 yr. c) 3.6 yr. d) 10.0 yr.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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