Machinery has decided to add new equipment

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Reference no: EM132249391

To resolve a capacity bottleneck in its manufacturing operations, McGuire Machinery has decided to add new equipment. Vendors for two reputable firms were requested to submit proposals. The fixed costs for proposal A are $60,000, and for proposal B, $75,000. The variable cost for A is $14.00, and for B, $11.50. The revenue generated by each unit is $25.

a) What is the break-even point in units for proposal A?

b) What is the break-even point in units for proposal B?

c) Which vendor should be chosen? Why?

Please show work.

Reference no: EM132249391

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