Question: Alternative Annual Fixed Cost Annual Variable Cost per Unit A $50,000 $20 B $100,000 $10 Vegas Herman In. is investigating implementing some new production machinery

Alternative Annual Fixed Cost Annual Variable Cost per Unit

A $50,000 $20

B $100,000 $10

Vegas Herman In. is investigating implementing some new production machinery as a part of its operations. Two alternatives have been found, and they have the following fixed & variable costs. What is the break-even point (which means break-even output)?

If Vegas Herman would like to produce 6,000 unit of output, which alternative would you like to recommend, A or B?

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