Company “A” has fixed expenses of P10000 per month and each unit of product has a variable cost of P0.02, while company “B” has fixed expenses of P2200 per month and can produce the same unit of product at 0.05 variable cost. At what number of units of annual production will company “A” have the same overall cost as company “B”?
Company “A” has fixed expenses of P10000 per month and each unit of product has a variable cost of P0.02, while company “B” has fixed expenses of P2200 per month and can produce the same unit of product at 0.05 variable cost. At what number of units of annual production will company “A” have the same overall cost as company “B”?
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter9: Applications Of Cost Theory
Section: Chapter Questions
Problem 5E
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Company “A” has fixed expenses of P10000 per month and each unit of product has a variable cost of P0.02, while company “B” has fixed expenses of P2200 per month and can produce the same unit of product at 0.05 variable cost. At what number of units of annual production will company “A” have the same overall cost as company “B”?
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