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Twizzlers Candy Company is considering a new manufacturing process to produce new strawberry twists. Two processes have been identified that can produce the same production level of twists. The first process would incur $360,000 of fixed costs and $.06 per unit variable costs. The second process has fixed costs of $120,000 and variable costs of $.12 per unit.
(a) What is the breakeven quantity beyond which the first process is more attractive?
(b) What is the difference in total cost if the quantity produced is 5,000,000 units?
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