Question: 1. In your own words, describe the life-cycle cost concept. Why is the potential for achieving life-cycle cost savings greatest in the acquisition phase of the life cycle?
2. The annual fixed costs for a plant are $100,000, and the variable costs are $140,000 at 70% utilization of available capacity, with net sales of $280,000. What is the breakeven point in units of production if the selling price per unit is $40?