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4 September, 03:39

A product is currently made in a process-focused shop, where fixed costs are $9,000 per year and variable costs are $50 per unit. The firm is considering a fundamental shift in process, to repetitive manufacturing. The new process would have fixed costs of $90,000, and variable costs of $5. The cross over is at 1800 units annually. for volumes over 1800, the process focus is cheaper.

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  1. 4 September, 03:41
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    The cross over is at 1800 units annually. for volumes over 1800, the process focus is cheaper.

    Explanation:

    The crossover is at 1800 units annually.

    For volumes under 1800, the process focus is cheaper and lesser; for volumes that are over 1800 units, the repetitive manufacturing focus is cheaper and lesser

    Fixed cost : variable cost

    $90000:50 = $1800

    $9,000:5=$1800
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