CHICAGO Manufacturing operates two different processes, Process A and Process B$,$ to produce

a similar product. The company incurs both fixed and variable costs in these processes. Process

A: Fixed Costs: $$50,000$ per month; and variable Costs: $$8$ per unit produced. Process B: Fixed

Costs: $$30,000$ per month; and variable Costs: $$10$ per unit produced. The expected production

volume for both processes is $9,000$ units per month.

a$)$ Determine the crossover quantity and cost $($Ans$.10,000$; $$130,000).$ Show the crossover

point graphically.

b$)$ Calculate the total cost for each process at the expected production volume.

c$)$ Identify which process has a lower total cost at the expected production volume.

d$)$ If the expected production volume increases to $12,000$ units per month, analyze how the

total cost structure for each process would change