Question: Bismarck Manufacturing intends to increase capacity through the addition of new equipment. Two vendors have presented proposals. The fixed cost for proposal A is $65,000,

Bismarck Manufacturing intends to increase capacity through the addition of new equipment. Two vendors have presented proposals. The fixed cost for proposal A is $65,000, and for proposal B, $34,000. The variable cost for A is $10, and for B, $14. The revenue generated by each unit is $18.
(a) What is the break-even point for each proposal?
(b) If the expected volume is 8,300 units, which alternative should be chosen?

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