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Determine each alternative's break-even point in units based off of the information below? Please include steps of each problem below so that I can have an understanding on how to solve it.
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 $37,000 for A and $35,000 for B; variable costs per unit would be $8 for A and $11 for B; and revenue per unit would be $16.
a. Determine each alternative's break-even point in units. (Round your answer to the nearest whole amount.)
QBEP,A ______ units
QBEP,B _______ units
b. At what volume of output would the two alternatives yield the same profit? (Round your answer to the nearest whole amount.)
Profit units ______units
c. If expected annual demand is 13,000 units, which alternative would yield the higher profit?
Higher profit: Select one
A or B
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