A company wants to buy a new machines. Two machines have been identified tha Mac

Question

A company wants to buy a new machines. Two machines have been identified tha Machine A is expected to incur a fixed cost of Machine B is expected to incur a fixed cost of $184061 per year and add a variable cost of $53 per unit. The company must select machine A or machine B What is the quantity for which the total costs for the two machines are equal? t provide the same level of product quality. $133042 per year and add a variable cost of $96 per unit. The quantity is units per year NOTE: Use at least 4 decimals. Next pa

Explanation / Answer

Total cost = Fixed cost + variable cost

Total Cost of A =  Total Cost of B

Fixed cost A + variable cost A = Fixed cost A + variable cost A

133042 + Q*96 = 184061 + Q*53 ( Let Q be the quantity for which The total cost for both machines is eqaul)

Q8(96-53) = 184061-133042

Q= 51019 / 43 = 1186.4883

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