Determine each alternative break-even point in units

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Reference no: EM132282884

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 $40,000 for A and $30,000 for B; variable costs per unit would be $10 for A and $12 for B; and revenue per unit would be $15 for A and $16 for B.

a) Determine each alternative's break-even point in units

b) At what volume of output would the two alternatives yield the same profit?

Reference no: EM132282884

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