Break-even point of using automated equipment

Reference no: EM1376571

It costs $1,000 for hand tools and $1.50 labor per unit to produce a product. Another alternative is to manufacture the product by an automated process that costs $15,000, with a $0.50 per-unit cost. With an annual production rate of 5,000 units, how long will it take to reach break-even point of using automated equipment? The answer is 2.8 years. How do we get this?

Reference no: EM1376571

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