Question: 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

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 cost for proposal A is $12.00; and for proposal B, $10.00. The revenue generated by each unit is $20.00.

a) What is the breakeven point in units for proposal A?

b) What is the breakeven point in units for proposal B?

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