Problem 5-4
| 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 $39,000 for A and $30,000 for B; variable costs per unit would be $10 for A and $11 for B; and revenue per unit would be $15. |
| a. | Determine each alternative’s break-even point in units. (Round your answer to the nearest whole amount.) |
| QBEP,A |
Problem 5-4
| 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 $39,000 for A and $30,000 for B; variable costs per unit would be $10 for A and $11 for B; and revenue per unit would be $15. |
| a. | Determine each alternative’s break-even point in units. (Round your answer to the nearest whole amount.) |
| QBEP,A |
