Small Sally's Manufacturing currently produces its lead product on a machine that has a variable cost of $0.47 per unit, and fixed costs of $87,000. Small Sally is considering purchasing a new machine that will drop the variable cost to $.14 per unit, but has a fixed cost of $114,000. What is the cross-over point between the two machines?

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The Answer of Small Sally's Manufacturing currently produces its lead product on a machine that has a variable cost of $0.47 per unit, and fixed costs of $87,000. Small Sally is considering purchasing a new machine that will drop the variable cost to $.14 per unit, but has a fixed cost of $114,000. What is the cross-over point between the two machines?

Small Sally's Manufacturing Currently Produces Its Lead Product on a Machine