Which alternative has the lowest break-even quantity

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Reference no: EM131860940

Question: Create a profit model in Excel for each of the three alternatives

Put all three models, side by side in one worksheet.

Use your models to find the answers to the questions.

A firm is considering three capacity alternatives: A, B, and C.

Alternative A would have an annual fixed cost of $100,000 and variable costs of $22 per unit.

Alternative B would have annual fixed costs of $120,000 and variable costs of $20 per unit.

Alternative C would have fixed costs of $80,000 and variable costs of $30 per unit.

Revenue is expected to be $50 per unit.

(A) Which alternative has the lowest break-even quantity?

(B) Which alternative will produce the highest profits for an annual output of 10,000 units?

Reference no: EM131860940

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