I have been searching for a formula to determine the annual unit sales volume at which it would be indifferent between two manufacturing methods and have been unsuccessful.
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I have been searching for a formula to determine the annual unit sales volume at which it would be indifferent between two manufacturing methods and have been unsuccessful.
Assuming by "indifferent" you mean that both manufacturing techniques yield the same gross profit, and assuming that selling price isn't affected, then what you want is the point where (price - cost per unit) times volume is the same for both processes. If C_1 = average cost of manufacture per piece for method 1 and C_2 is average cost per piece for method 2, then:
(P-C_1) V_1 = (P-C_2) V_2
Or:
V_2 = (P-C_1)V_1/(P-C_2)
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