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Homework answers / question archive / QUESTIONS Dandle's Candes will be producing a new line of dripless candies in the coming years and has the choice of producing the candles in a large factory with a small number of workers or a small factory with a large number of workers Each candle will be sold for $10
QUESTIONS Dandle's Candes will be producing a new line of dripless candies in the coming years and has the choice of producing the candles in a large factory with a small number of workers or a small factory with a large number of workers Each candle will be sold for $10. If the large factory is chosen, the cost per un to produce each candle will be $261, while the cost per unit will be 10 for the small factory The large factory would have bed cash costs of 122 milion and a depreciation expense of $300.000 per year, while thote ses would be $430,000 and $100.000 in the smal tactory A un sales the two factories would yield the same accounting operating proft (Round answers to nearest whole units Omit comme sign() in answer. A intermittent calculations should be rounded to decimal places before carrying to next calculation)
Answer: At 464,623 unit sales, the two factories would yield the same accounting operating profit.
Let the unit sales be Q.
Q x ( 10 - 2.61 ) - 2,500,000 = Q x ( 10 - 6.85 ) - 530,000
or 7.39 Q - 2,500,000 = 3.15 Q - 530,000
or 4.24 Q = 1,970,000
or Q = 464,623 units