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A rotational molding operation has fixed costs of $7,000 per year and variable costs of $47...

A rotational molding operation has fixed costs of $7,000 per year and variable costs of $47 per unit. If the process is automated via conveyor, its fixed cost will be $49,000 per year, but its variable cost will be only $10 per unit. Determine the number of units each year necessary for the two operations to break even.

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Operation Types Rotational molding Automated via conveyor Difference
Fixed costs $             7,000 $             49,000 $            42,000
Variable costs per unit $                   47 $                     10 $                    37
Difference in fixed costs (49000-7000) $            42,000
Difference in variable costs per unit (47-10) $                    37
Number of units             1,135.14
Number of units cannot be in the fraction. Therefore, number of units is rounded to the nearest unit.                   1,135
Number of units each year necessary for the two operations to break even                   1,135

ekkarill92 answered 1 year ago
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