Alternative A has fixed initial costs of $ X per year and variable costs of $45...

Alternative A has fixed initial costs of $ X per year and variable costs of $45 per unit. Alternative B has fixed costs $20,000 per year and variable costs of $30 per unit. Determine the value of X, if the breakeven quantity is 900. Assume there is no any other cost.

Expert Solution

TC for B per yr = 20000 + 30*900 = 47000

TC for A per yr = X + 45*900 = X + 40500

As per given condition

X = 47000 - 40500 = 6500

Rahul Sunny answered 2 years ago

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