Cost Analysis

Boeing and Airbus Potential Joint Venture: Variable Cost Analysis

In order to use the provided information in determining optimum output and price levels as well as to determine whether or not Boeing and Airbus should engage In a joint venture on the VLCT project or would be better served by each pursuing their own individual venture, the simplest approach would simply be to graph the given equations (with the relevant additional information incorporated as necessary) an analyzing variances in slope and points of intersection. This visual analysis can be used to develop direct quantitative assessments of pricing structures and costs at various levels of output, determining the most cost-effective plan of action for Boeing and Airbus both collectively and individually.

Specific components of this method of analysis will include plotting both the demand curve estimated by Boeing along with the company's estimated total variable cost (TVC) curve on...
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