Considering three alternatives for producing new product

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A manufacturing firm is considering three alternatives for producing a new product. The revenue is $10 per unit. Alternative A has a monthly fixed cost of $1,300 and a variable cost of $7 per unit. Alternative B has a monthly fixed cost of $2,300 and the variable cost is $5 per unit. Alternative C has a monthly fixed cost of $6,300 and the variable cost is $2 per unit.

a) What output level produces an annual profit of $90,000 with alternative C?

b) Determine the range of output over which alternative A is profitable.

c) Determine the range of output over which alternative A is best and is profitable.

Reference no: EM131147259

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