Question: Fixed cost (per Variable cost (per unit) year) $6 Option 1 Option 2 $600,000 $150,000 $15 Arktec Manufacturing must choose between the following two capacity

Fixed cost (per Variable cost (per unit) year) $6Fixed cost (per Variable cost (per unit) year) $6Fixed cost (per Variable cost (per unit) year) $6

Fixed cost (per Variable cost (per unit) year) $6 Option 1 Option 2 $600,000 $150,000 $15 Arktec Manufacturing must choose between the following two capacity options. Click the icon to view the options table. a. What would the cost be for each option if the demand level is 35,000 units per year? If it is 90,000 units per year? Calculate the total costs for each option if the demand level is 35,000 units per year (enter your responses as whole numbers). Total cost (per year) Demand (units per year) 35,000 35,000 Option 1 Option 2 Find the total costs for each option if the demand level is 90,000 units per year (enter your responses as whole numbers). Total cost (per year) Demand (units per year) 90,000 90,000 Option 1 Option 2 b. In general, which option do you think would be better as volume levels increase? As they decrease? O A. As volume levels increase, Option 1 will be better, since the variable cost is lower. As volumes decrease, Option 2 will be better, as the fixed cost is lower. O B. As volume levels increase, Option 1 will be better, since the fixed cost is lower. As volumes decrease, Option 1 will be better, as the variable cost is lower. O C. As volume levels increase, Option 2 will be better, since the variable cost is lower. As volumes decrease, Option 1 will be better, as the fixed cost is lower. O D. As volume levels increase, Option 2 will be better, since the fixed cost is lower. As volumes decrease, Option 2 will be better, as the variable cost is lower. c. The indifference point is units. (Enter your response rounded to the nearest whole number.)

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