|- You have the opportunity to invest in one of two companies. Company X has fixed cost of $10 000 000 and variable costs of $5 per unit. Company Y's fixed costs are only $6 000 000, But it has variable costs of $6 per unit. Both companies sell their product for $7.5 each. 1. Compute the total cost and total revenue for each company? 2. Find the break-even point for each company? 3. Draw the break-even chart?

|- You have the opportunity to invest in one of two companies. Company X has fixed cost of $10 000 000 and variable costs of $5 per unit. Company Y's fixed costs are only $6 000 000, But it has variable costs of $6 per unit. Both companies sell their product for $7.5 each. 1. Compute the total cost and total revenue for each company? 2. Find the break-even point for each company? 3. Draw the break-even chart?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

100%

71%
|- You have the opportunity to
invest in one of two
companies. Company X has
fixed cost of $10 000 000 and
variable costs of $5
Company Y's fixed costs are
only $6 000 000, But it has
variable costs of $6 per unit.
Both companies sell their
product for $7.5 each.
1. Compute the total cost and
total revenue for each
per
unit.
company?
2. Find the break-even point
for each company?
3. Draw the break-even chart?
4. Which company do you
choose to invest your
money in? Why?
450
400

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