The selling price of a product is set at $30. The firm can outsource the production and pay $25 per unit. Alternatively, the firm can invest in assembly line X and Y and produce the product on its own. Assembly line X requires a fixed cost of $270,000 and assembly line Y requires a fixed cost of $450,000. The unit variable cost will be $18 with assembly X and $12 with assembly line Y.
What is the break-even demand for assembly line X?
Assembly line X should never be chosen. A. True B. False