Company A has fixed expenses of $15,000 per year and each unit of product has a $0.20 variable cost. Company B has fixed expenses of $6,000 per year and can produce the same product at a $0.60 variable cost per unit. At what number of units of annual production will Company A have the same overall cost as Company B? (i.e., find the breakeven point)

Managerial Economics: A Problem Solving Approach
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ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Chapter3: Benefits, Costs, And Decisions
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Company A has fixed expenses of $15,000 per year and each unit of product has a $0.20 variable cost. Company B has fixed expenses of $6,000 per year and can produce the same product at a $0.60 variable cost per unit.

At what number of units of annual production will Company A have the same overall cost as Company B? (i.e., find the breakeven point)

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