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Three production processes - A, B, and C - have the following cost structure:??ProcessFixed Costper Year
Variable Cost
per Unit
A
$120,000
$3.00
B
90,000
4.00
C
80,000
4.50
a. What is the most economical process for a volume of 8,000 units?
b. How many units per year must be sold with each process to have annual profits of $50,000 if the selling price is $6.95 per unit?
c. What is the break-even volume for each process?
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