Author Question: Process X has fixed costs of $10,000 and variable costs of $2.40 per unit. Process Y has fixed costs ... (Read 172 times)

Hungry! · **on:** Dec 3, 2019

Process X has fixed costs of $10,000 and variable costs of $2.40 per unit. Process Y has fixed costs of $9,000 and variable costs of $2.25 per unit. Which of the following statements is true?
◦ Process Y is cheaper than process X at all volumes; there is no crossover point.
◦ The crossover point is approximately 6667 units.
◦ Process X should be selected for very large production volumes.
◦ It is impossible for one process to have both of its costs lower than those of another process.
◦ Process X is more profitable than process Y and should be selected.

wshriver · **Reply #1 on:** Dec 3, 2019

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