Machine | Setup Costs | Variable Cost per Unit |
A | $8 | $0.24 |
B | $80 | $0.09 |
The manager wants to determine which machine to schedule to minimize total cost when an order requires milling.
Determine the total cost equation for each machine.
Plot these two equations on one graph.
At what volume do machines A and B have the same total cost?
What decision rule should the manager use when determining which machine to use for a particular order requiring milling?
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