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Net operating income

A company has identified two methods for producing playing cards. 1 method involves using a machine having a fixed cost of $10K and variable costs of $1 per deck. The other method would use a less expensive machine (fixed cost = $5K) but it would require greater variable costs (1.50 per deck of cards. If the selling price per deck will be the same under each method at what level of output will the two methods produce the same net operating income


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The net operating income would be Revenue-Total Costs. If the number of decks sold is x. Then for machine 1 the ...

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The solution explains how to calculate the net operating income