1 2 Machine A Machine B Known Parameters: 4. Selling Price per Unit (SPU) 5 Fixed Cost (FC) 6 Variable Cost Per Unit (VCU) A fabrication company must replace its widget machine and is evaluating the capabilities of two available machines. Machine A would cost the company $75,000 in fixed costs for the first year. Each widget produced using Machine A would have a variable cost of $16. Machine B would have a first year fixed cost of 62,000, and widgets made on this machine would have a variable cost of $20. Machine A would have the capacity to make 18,000 widgets per year, which is approximately double the capacity for Machine B, (a) of widgets sell for $28 each, find the break even point for each machine. 7 Input Data: Number of Units (N) 10 (b) If the fabrication company estimates a demand of 6,500 units in the next year, which machine should be selected? Explain why? 11 Results: 12 Total Revenue (TR) 13 Fixed Cost (FC) 24 Total Variable Cost (TVC) 15 Tatal Cost (TC) 16 Profit (P) | H in BEPS 20