Assume that you and your brother plan to open a business that will make and sell a newly designed type of sandal. Two robotic machines are available to make the sandals, Machine A and Machine B. The price per pair will be $19.50 regardless of which machine is used. The fixed and variable costs associated with the two machines are shown below. What is the difference between the breakeven points for Machines A and B? (Hint: Find BEB - BEA)
Machine A
- Price per pair (P) $19.50
- Fixed costs (F) $25,000
- Variable cost/unit (V) $7.00
Machine B
- Price per pair (P) $19.50
- Fixed costs (F) $100,000
- Variable cost/unit (V) $4.00
- 3,784
- 4,318
- 3,739
- 4,674
- 4,452