Answer:
Explanation:
To determine which machine is more cost-effective, we need to compare the total cost for each machine for a given number of items produced.
Let's say we want to produce x items.
For Machine A, the total cost would be:
Total Cost A = Fixed Cost A + Variable Cost A
Total Cost A = $60 + ($1.00 * x)
Total Cost A = $60 + $1.00x
For Machine B, the total cost would be:
Total Cost B = Fixed Cost B + Variable Cost B
Total Cost B = $20 + ($1.50 * x)
Total Cost B = $20 + $1.50x
To find out which machine is more cost-effective for a specific number of items produced, we can set the two total cost equations equal to each other and solve for x:
$60 + $1.00x = $20 + $1.50x
$0.50x = $40
x = 80
So, if we need to produce 80 items, both machines will cost the same amount:
Total Cost A = $60 + ($1.00 * 80) = $140
Total Cost B = $20 + ($1.50 * 80) = $140
However, if we need to produce less than 80 items, Machine A will be more cost-effective, and if we need to produce more than 80 items, Machine B will be more cost-effective.