What is the break-even point in units and dollars

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You are an operations manager of a small manufacturing enterprise. Your owner intends to increase the production capacity through the addition of new equipment. Two vendors have presented proposals. The fixed costs for proposal A are $50,000, and for proposal B, $70,000. The variable cost for A is $12.00, and for B, $10.00. The revenue generated by each unit is $20.00.

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

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

c) If the expected volume is 15,000 units, which alternative should be chosen?

Reference no: EM132168304

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