Question

A machine to manufacture fasteners has a setup cost of $1,100 and a unit cost of $0.006 for each fastener manufactured. A newer machine has a setup cost of $1,700 but a unit cost of only $0.0015 for each fastener manufactured. Find the break point. (Round your answer to the nearest whole unit.)

Answer 1

Answer:133333 units

Explanation:

Given

For First machine

Setup cost=$ 1100

unit cost =$ 0.006

For new machine

Setup cost=$ 1700

unit  cost=$ 0.0015

Let x units be manufactured .

for Break even point

First machine manufacturing cost=New machine manufacturing cost

1100+(0.0060)x=1700+(0.0015)x

(0.0045)x=600

$x=133333.333\approx 133333 units$