Considering updating current production line

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A small business company is considering updating the current production line. There are two plans. For plan A, the fixed cost will be $42,000 and the variable cost will be $28 per unit after the update. For plan B, the fixed costs will be $45,000 and the variable cost will be $25 per unit after the update. Please answer the following questions: (a) Suppose the selling price is $40, what is the break-even volume for each plan? Which plan has a lower break-even volume? (b) Suppose the selling price is $40. Also, the company aims to achieve a profit of $18,000 after the update. What selling volume will be required to achieve the profit for each plan? Which plan has a lower volume?

Reference no: EM132193631

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