Question: inal Sound Off 1) Two production processes A, B have the following cost structure as shown in the diagram below: (15 min) 20 marks

inal Sound Off 1) Two production processes "A, B" have the following

inal Sound Off 1) Two production processes "A, B" have the following cost structure as shown in the diagram below: (15 min) 20 marks List of formulas: Profit Revenue-Total cost Revenue Selling price volume Fixed Cost Process per Year A $109,000 B $76,000 Variable Cost per Unit $4.00 $5.50 Break even volume (Fixed cost)/ (Unit contribution margin) Total cost Fixed cost + cost per item volume a. What is the most economical process for a volume of 6,800 units? (8 marks) b. How many units per year must be sold with process B to have annual profits of $75,000 if the selling price is $12.5 per unit? (6 marks) c. Calculate the break-even volume for process A assuming $12.5 selling price. (6 marks)

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