Small Firm

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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  

    • 9 years ago
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