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What are the volume ranges

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Question - Palmetto Bay Machine Shop has a contract for 12,000 units of a new product. Samsung Jordan, the owner, has calculated the cost for three process alternatives. Fixed costs will be: for A equipment (A), $100,000; B manufacturing (B), $70,000; and C automation (C), $60,000. Variable costs will be: A, $2; B, $4; and C, $5.

a) What are the volume ranges where each process should be used?

b) Based on above question (a), which alternative should he choose?

Reference no: EM132906239

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