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Question: Gabriel Manufacturing must implement a manufacturing process that reduces the amount of toxic by-products. Two processes have been identified that provide the same level of toxic by-product reduction. The first process would incur $300,000 of fixed costs and $600 per unit of variable costs. The second process has fixed costs of $120,000 and variable costs of $900 per unit.
1. What is the break-even quantity beyond which the first process Is more attractive?
2. What is the difference in total cost if the quantity produced is 800 units?
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