Question from PM June 2023 Exam.

This topic has 3 replies, 2 voices, and was last updated 2 years ago by Vaish31.

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June 7, 2023 at 5:28 pm #686377
Vaish31
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I got this question in Sec A. I will be grateful to know the right answer:
A company is considering to implement an automation system. After the implementation, fixed costs will increase to $120,000 from $40,000. The variable cost per unit will fall from $22 to $12.
What is the minimum number of output that has to be produced in order to make the implementation of the system worthwhile?
___________ units.
June 8, 2023 at 4:32 am #686435
MajorR123
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random guessing(I got a different set) the answer is probably 12000 units.
June 8, 2023 at 5:16 am #686437
Vaish31
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Alright, Thanks. I got the same ans.
June 16, 2023 at 5:58 am #687102
Vaish31
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Apparently, the answer is 8000 units.:
Increase in TFC = Decrease in TVC
$80000 =( x units * $10).
Which gives x = 8000 units.
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