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The cost structure of two firms competing in the same industry is represented...

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Accounting

The cost structure of two firms competing in the same industry is represented by the following cost formulas: Company X = $1,561,000+ $37/unit; Company Z = $896,000+ $72/unit. The selling price is $125 per unit for both companies.
Required:
Calculate the indifference point between the two cost structures, that is, the amount of unit sales that produce the same operating income for Company X and Company Z.
If sales volume were expected to increase by 25% over the next two years, which cost structure would you prefer?

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