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How many units per year must be sold with each process

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Reference no: EM133102132

Question - A toy company runs three manufacturing processes (P1, P2, and P3) under the following production cost structure:

Process

Fixed Cost per Year

Variable Cost per Unit

P1

$120,000

$3.00

P2

90,000

4.00

P3

80,000

4.50

Required -

a. What is the most economical process for a volume of 8,000 units?

b. How many units per year must be sold with each process to have annual profits of $50,000 if the selling price is $6.95 per unit?

c. What is the break-even volume for each process?

Reference no: EM133102132

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