Poisson Calculators has found that it is indifferent between purchasing a high-capacity vacuum component assembly machine or a lower capacity machine as long as sales are above 1,900 units per month. The price of each calculator is $70. The high-capacity machine has cash expenses of $100,000 per month and depreciation and amortisation expenses of $30,000 per month, while the alternative has cash expenses of $30,000 per month and depreciation and amortisation expenses of $5,000 per month. Under the low-capacity alternative, variable costs per unit are $60. If the company bases its decisions on the Accounting Operating Profit Break-even, then what is the variable cost per unit under the high-capacity alternative? a. $10 b. $47 c. $60 d. $70

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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Poisson Calculators has found that it is indifferent between purchasing a high-capacity vacuum component assembly machine or a lower capacity machine as long as sales are above 1,900 units per month. The price of each calculator is $70. The high-capacity machine has cash expenses of $100,000 per month and depreciation and amortisation expenses of $30,000 per month, while the alternative has cash expenses of $30,000 per month and depreciation and amortisation expenses of $5,000 per month. Under the low-capacity alternative, variable costs per unit are $60. If the company bases its decisions on the Accounting Operating Profit Break-even, then what is the variable cost per unit under the high-capacity alternative? a. $10 b. $47 c. $60 d. $70
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