Question: Two different manufacturing processes are being considered for making a new product. The first process is less capital-intensive, with fixed costs of only $46,400 per

Two different manufacturing processes are being considered for making a new product. The first process is less capital-intensive, with fixed costs of only $46,400 per year and variable costs of

$720 per unit. The second process has fixed costs of $400,100 but has variable costs of only $210 per unit.

a. What is the break-even quantity, beyond which the second process becomes more attractive than the first?

b. If the expected annual sale for the product is 840 units, which process would you choose?

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