Question

At what level of sales​ (in units) would the company be indifferent between the two lease​ options? Show your proof. Begin by selecting the equation to determine the indifference point. ​(Abbreviations used" FC​ = Fixed​ costs, VCU​ = Variable costs per​ unit) (VCU (option A) x Units) + FC (option A) = (VCU (option B) x Units) + FC (option B) The indifference point is candles.

Answer 1

Answer:

450 units

Explanation:

The computation of the level of sales in units would become indifference is shown below:

VCU (option A) × Units) + FC (option A) = (VCU (option B) × Units) + FC (option

B)

{($6 + $3 + $3 × n) + $3,000} = {($6 + $3 + $3 + $30 × 10% × n) + $1,650}

($12 × n + $3,000) = ($12 + $3 × n + $1,650)

($12 × n + $3,000) = ($15 × n + $1,650)

$15n - $12n = $3,000 - $1,650

$3n = $1,350

n = 450 units

hence, the level of sales units is 450 units