Question: Two options are under consideration for a machine that makes hard candy. Machine A has fixed cost of 8,901 and a variable cost of 0.45
Two options are under consideration for a machine that makes hard candy. Machine A has fixed cost of 8,901 and a variable cost of 0.45 per pound. Machine B has a fixed cost of 7,599 and a variable cost of 0.52 per pound. The product amount where the total cost of each machine equals is 18,600. A third option has been proposed by salesman who says the machine is worth the extra cost (a fixed cost of 10,401) when the volume is 25,000 or above. What is the maximum variable cost of this product if the salesmans claim is true?
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