Question: Tactics Ltd is deciding between two cost structures: Labour intensive Capital intensive Variable cost per unit 60 45 Annual fixed costs 250,000 400,000 Tactics Ltd's

Tactics Ltd is deciding between two cost structures:

Labour intensive Capital intensive

Variable cost per unit 60 45

Annual fixed costs 250,000 400,000

Tactics Ltd's selling price for its product is $120 per unit.

Required:

What sales volume will Tactics Ltd's management be indifferent as to the alternative cost structures? (4 marks)

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