An electronics firm is currently manufacturing an item that has a variable cost Of .50 per unit. Please write the answers clearly I am 60 years old and hard for me to understand thank you. Please write out the steps •• S7.23An electronics firm is currently manufacturing an item that has a variable cost of$.50 per unit and a selling price of $1.00 per unit. Fixed costs are $14,000. Currentvolume is 30,000 units. The firm can substantially improve the product quality byadding a new piece of equipment at an additional fixed cost of $6,000. Variable costwould increase to $.60, but volume should jump to 50,000 units due to a higher-quality product. Should the company buy the new equipment? PX

The given details are that the fixed cost is $14,000 and the variable cost is given to be $0.50 per…

Answered: •• S7.23 An electronics firm is…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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An electronics firm is currently manufacturing an item that has a variable cost Of .50 per unit. Please write the answers clearly I am 60 years old and hard for me to understand thank you. Please write out the steps

•• S7.23
An electronics firm is currently manufacturing an item that has a variable cost of
$.50 per unit and a selling price of $1.00 per unit. Fixed costs are $14,000. Current
volume is 30,000 units. The firm can substantially improve the product quality by
adding a new piece of equipment at an additional fixed cost of $6,000. Variable cost
would increase to $.60, but volume should jump to 50,000 units due to a higher-
quality product. Should the company buy the new equipment? PX

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