Break-even Analysis Markland Manufacturing intends to increase capacity by overcoming a bottleneck operation by adding new...
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Break-even Analysis Markland Manufacturing intends to increase capacity by overcoming a bottleneck operation by adding new equipment. Two vendors have presented proposals. The fixed costs for proposal A are $50,000, and for proposal B, $70,000. The variable costs for A is $12.00, and for B, $10.00. The revenue generated by each unit is $20.00. • What is the break-even point in units for both proposals, A and B? • At what volume of output would the two alternatives yield the same profit? • Markland's forecast predicts the next three year's demand will be 11,000 units, 12,000 units, and 13,500 units, respectively. How much money should Markland expect to make over these three years? Break-even Analysis Markland Manufacturing intends to increase capacity by overcoming a bottleneck operation by adding new equipment. Two vendors have presented proposals. The fixed costs for proposal A are $50,000, and for proposal B, $70,000. The variable costs for A is $12.00, and for B, $10.00. The revenue generated by each unit is $20.00. • What is the break-even point in units for both proposals, A and B? • At what volume of output would the two alternatives yield the same profit? • Markland's forecast predicts the next three year's demand will be 11,000 units, 12,000 units, and 13,500 units, respectively. How much money should Markland expect to make over these three years?
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Total Cost Total Fixed Cost FC Total Variable Cost Total Variable Cost Variable CostUnit VC Total nu... View the full answer
Related Book For
A Survey of Mathematics with Applications
ISBN: 978-0134112107
10th edition
Authors: Allen R. Angel, Christine D. Abbott, Dennis Runde
Posted Date:
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