Bottleneck operation by adding new equipment

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Reference no: EM131791373

Markland Manufacturing intends to increase capacity by overcoming a bottleneck operation by adding new equipment. Two vendors have presented proposals. The fixed costs are $55,000 for proposal A and $80,000 for proposal B. The variable cost is $13.00 for A and $10.00 for B. The revenue generated by each unit is $20.00.

a) Vendor A and Vendor B have the same cost when the output volume =

b) State at which production ranges each vendor is optimal

Reference no: EM131791373

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