Company a and b manufactures the same article. Company a, relying mostly on machines, has fixed expenses of ₱12,000 per month and direct cost of ₱8.00 per unit. Company b, using more hand work, has fixed expenses of ₱4,000 and direct cost of ₱20 per unit. At what monthly production rate will total cost per unit is the same for the two companies. Create a cash-flow diagram if needed.

Company a and b manufactures the same article. Company a, relying mostly on machines, has fixed expenses of ₱12,000 per month and direct cost of ₱8.00 per unit. Company b, using more hand work, has fixed expenses of ₱4,000 and direct cost of ₱20 per unit. At what monthly production rate will total cost per unit is the same for the two companies. Create a cash-flow diagram if needed.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 4EA: Assume a company is going to make an investment of $450,000 in a machine and the following are the...

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