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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![9. 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 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 is
a) 2.0 yr.
b) 2.8 yr.
c) 3.6 yr.
d) 10.0 yr.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F463cb2e4-14c7-484e-bd66-dba650a14f4c%2F071df7ba-1041-4bd2-9767-3249a9c34a5a%2Ff6tyx7b_processed.jpeg&w=3840&q=75)
Transcribed Image Text:9. 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 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 is
a) 2.0 yr.
b) 2.8 yr.
c) 3.6 yr.
d) 10.0 yr.
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