How much would the variable cost per unit have to be in Year 5
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September 6, 2019How much would the variable cost per unit have to be in Year 5
Wallingford leadership has narrowed the decision making down to two options. The first is a higher technology option in one location, and the other is a lower technology option in several locations. Assignment Use applicable business formulas to determine costs for both options. Consider the following questions: • Which is the lead cost alternative in Years 1, 5, and 10? • How much would the variable cost per unit have to be in Year 5 for the automated alternative to justify the additional annual fixed cost of the automated alternative over the manual alternative? • What other factors should be considered when deciding the following?