Annual Unit Sales Volume??
I am to determine the annual unit sales volume at which Martinez Company would be indifferent between either the Capital-Intensive or Labor-Intensive method.
I have calculated the break even point as being 156,750 units if they chose the capital and 113,926 for the labor. I then found the contribution ratio and divided it into the fixed costs to get $4,702,500.03 and $3,417,777.78 respectfully. Is this the annual unit sales volume? If not how do I find it? The question never tells me how many items were sold. I only know the variable costs and the fixed manufacturing costs. The unit sale price is $30 regardless of which method is chosen and the selling expense is $502,000 plus $2 per unit sold.
I am stuck. I do not know where to go from here. Please help.