Neco Model Questions Vol1 2023 Commerce Question 49
Practice objective / multiple choice question 49 from the 2023 Neco Model Questions Vol1 Commerce examination.
A warehouse can store a product using either method A (open rack) or method B (vertical lift). Method A incurs a fixed annual cost of \(\₦120{,}000\) plus a variable cost of \(\₦30\) per unit stored per year. Method B incurs a fixed annual cost of \(\₦200{,}000\) plus a variable cost of \(\₦15\) per unit stored per year. Determine the break‑even number of units at which the total annual cost of the two methods is equal, and indicate which method is cheaper for quantities above and below this point.
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About This Question
This is Neco Model Questions Vol1 2023 Commerce Question 49. It is one of the objective questions from the 2023 Neco Model Questions Vol1 Commerce examination.
Difficulty level: Hard .
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