Determine each alternative’s break-even point in units

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Reference no: EM13758143

A small firm intends to increase the capacity of a bottleneck operation by adding a new machine. Two alternatives, A and B, have been identified, and the associated costs and revenues have been estimated. Annual fixed costs would be $36,000 for A and $31,000 for B; variable costs per unit would be $8 for A and $11 for B; and revenue per unit would be $16.

Determine each alternative’s break-even point in units.

At what volume of output would the two alternatives yield the same profit?

Reference no: EM13758143

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