An electronics firm is considering two different manufacturing processes to make a new product. The first process is less capital-intensive, with fixed costs of $200,000 per year and variable costs of $2,400 per unit. The second (more capital-intensive) process has fixed costs of $1,000,000 per year but has variable costs of $450 per unit. The firm expects to sell the product at $3,200 per unit.

a)If the firm must process 1,500 units per year, what value must the fixed costs for the more capital-intensive process be for the firm to be indifferent between the two processes?

b)If the firm must process 1,500 units per year, what value must the variable costs for the less capital-intensive process be for the firm to be indifferent between the two processes? Answer with a whole number.

c)Now suppose that the firm is considering a third option - outsourcing the product at a cost of $2,900 per unit. Identify the approximate range over which outsourcing provides the lowest cost. What is the the range that it is the lowest cost?

d)For the more capital-intensive process, if the firm must process 1,500 units per year, how high must the variable costs be for the firm to break-even? What is the break-even quantity for the more capital-intensive process?