Machine A has a fixed cost of $40000 per year and a variable cost of S60 per unit. Machine B has an unknown fixed cost, but with this process 200 units can be produced cach month at a total variable cost of $2000. If the total costs of the two machines break even at a production rate of 2000 units per year, what is the fixed cost of machine B? Let FCB - fixed cost for B. Variable cost for B-2000/200 - S10/unit Total costs are equal at 2000 units per year. Then, 40,000 + 60(2000 units) = FCB + 10(2000 units) FCB $140,000 per year

Machine A has a fixed cost of $40000 per year and a variable cost of S60 per unit. Machine B has an unknown fixed cost, but with this process 200 units can be produced cach month at a total variable cost of $2000. If the total costs of the two machines break even at a production rate of 2000 units per year, what is the fixed cost of machine B? Let FCB - fixed cost for B. Variable cost for B-2000/200 - S10/unit Total costs are equal at 2000 units per year. Then, 40,000 + 60(2000 units) = FCB + 10(2000 units) FCB $140,000 per year

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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