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crossover point is that production quantity where: variable costs of one process equal the variable costs of another process fixed costs of a process are equal to its variable costs costs equal total revenues for a process costs for one process equal total costs for another process the process no longer loses money

## Answer

**Answer:** (d) Total

costs for one process equal total costs for another process.

**Explanation:**

Crossover point between two processes is determined using the

breakeven analysis. Suppose there are two processes A and B with a

given fixed cost and variable costs.

Total cost = Fixed cost + (Variable

cost x Number of units)

At the **crossover
point**,

**Total cost of process A =
Total cost of process B**

Let the breakeven quantity be given

by Q. Therefore,

F(A) + [V(A) x Q] = F(B) + [V(B) x

Q]

where,

F(A) = Fixed cost of process A

V(A) = Variable cost of process

A

F(B) = Fixed cost of process B

V(B) = Variable cost of process B

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