MegaTech is a fictional manufacturer of electronic products. Recent growth in the demand for the company€™s products requires it to invest in new production methods. The company has three alternatives:

(a) Invest in a small production facility that uses mature technology;

(b) Invent in a larger more automated facility with state-of-the art equipment; or 

(c) Outsource production to an electronic manufacturer in China. The cost scenarios for each production alternative are given in the following table. At what production volumes should each alternative be chosen?

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Fixed Cost Variable Cost per Unit Process Alternative (in U.S. dollars) (in U.S. dollars) Process A Process B Process C 250,000 50 750,000 20 60