Find the break-even point for alternative

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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 $11 for B; and revenue per unit would be $15.

-Find the break-even point for each alternative
-At what volume both alternatives yield the same profit?
-If the volume change (5000, 10000,12000, 15000 and 20000) and the monthly fixed costs increase by (500, 100 and 1500), perform a -way sensitivity analysis and draw the proper conclusions on what alternative you would recommend based on the profit.

Reference no: EM133019332

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