Question of the Week

To manufacture a product, it costs about $1200 for hand tools and $2 labor cost per unit. Another alternative is to manufacture the product by an automated process that costs $15,000 with a $0.60 per- unit cost. With an annual production rate of 5000 units, how long will it take to reach the break-even point?

A) 1.9 Years

B) 2.8 Years