Question

Process A has fixed costs of $1000 and variable costs of $5.75 per unit. Process B has fixed costs of $850 and variable costs of $5.50 per unit. Which of the following statements is/are TRUE?

Group of answer choices (can choose multiple if applicable):
- It is not possible for a process to have both fixed cost and variable costs lower than those of another process.
- Process B is cheaper than process A at all volumes.
- Process A should be selected for very large production volumes.
- The crossover point is 600 units.

Answer 1

Step-by-step explanation:

Process A has fixed costs of $1000 and variable costs of $5.75 per unit. Process B has fixed costs of $850 and variable costs of $5.50 per unit. Which of the following statements is/are TRUE?

Group of answer choices (can choose multiple if applicable):

- It is not possible for a process to have both fixed cost and variable costs lower than those of another process.

- Process B is cheaper than process A at all volumes.

- Process A should be selected for very large production volumes.

- The crossover point is 600 units.