Determine each alternative break-even point in units

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Reference no: EM13226344

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 $38,000 for A and $31,000 for B; variable costs per unit would be $7 for A and $11 for B; and revenue per unit would be $19

A-Determine each alternative's break-even point in units. (Round your answer to the nearest whole amount.

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

C- If expected annual demand is 10,000 units, which alternative would yield the higher profit.

Reference no: EM13226344

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