Question

Company a is considering replacing its current production line. What is the breakeven quantity for the new production line?

Option a: 30,000 units,
Option b: 37,500 units,
Option c: 45,000 units,
Option d: 52,500 units

Answer 1

Option b: 37,500 units is the breakeven quantity for the new production line.

Step-by-step explanation:

In order to determine the breakeven quantity for the new production line, we need to consider the fixed costs and the variable costs. The breakeven quantity is the point at which the company's total revenue equals its total cost, resulting in neither profit nor loss. Option b: 37,500 units is the breakeven quantity for the new production line.