Solution-For what output range would a be preferred

For what output range would a be preferred

Reference no: EM132483851

A firm is considering three capacity alternatives: A and B. Alternative A would have an annual fixed cost of $100,000 and variable costs of $22 per unit. Alternative B would have fixed costs of $80,000 and variable costs of $30 per unit. Revenue is expected to be $50 per unit.

a. For what output range would A be preferred?

b. For what output range would B be preferred?

c. If annual sales were 10,000 units, which would be the lowest-cost option?

Reference no: EM132483851

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For what output range would a be preferred

Reference no: EM132483851

Reference no: EM132483851

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