Big Mike's Manufacturing currently produces its lead product on a machine that has a variable cost of $0.39 per unit, and fixed costs of $65,000. Big Mike is considering purchasing a new machine that will drop the variable cost to $.24 per unit, but has a fixed cost of $135,000. What is the cross-over point between the two machines (round to the nearest whole unit)?

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The Answer of Big Mike's Manufacturing currently produces its lead product on a machine that has a variable cost of $0.39 per unit, and fixed costs of $65,000. Big Mike is considering purchasing a new machine that will drop the variable cost to $.24 per unit, but has a fixed cost of $135,000. What is the cross-over point between the two machines (round to the nearest whole unit)?

Big Mike's Manufacturing Currently Produces Its Lead Product on a Machine